In the United States, no single agency collects all taxes. The Internal Revenue Service handles federal income, payroll, estate, and gift taxes; state revenue departments collect state income and sales taxes; county and city offices collect property taxes and local sales taxes; the Alcohol and Tobacco Tax and Trade Bureau collects federal excise taxes on alcohol, tobacco, and firearms; and U.S. Customs and Border Protection collects duties on imported goods. Which agency you deal with depends entirely on the type of tax involved.
The Internal Revenue Service
The IRS is the largest bureau within the U.S. Department of the Treasury and does most federal tax collection.1U.S. Department of the Treasury. Bureaus Under 26 U.S.C. 7801, the Secretary of the Treasury has authority to administer and enforce the Internal Revenue Code, and the IRS carries out that responsibility day to day.2Office of the Law Revision Counsel. 26 U.S.C. 7801 – Authority of Department of the Treasury
Income Tax
The IRS collects federal income tax from individual workers, self-employed people, corporations, estates, and trusts. If you earn wages, your employer withholds income tax from each paycheck and sends it to the IRS on your behalf. If you are self-employed or run a business, you pay directly through quarterly estimated payments.
Payroll Taxes
The IRS also enforces the Federal Insurance Contributions Act, which funds Social Security and Medicare. Employees pay 6.2% of wages toward Social Security and 1.45% toward Medicare, for a combined 7.65%.3Office of the Law Revision Counsel. 26 U.S.C. 3101 – Rate of Tax Employers match those amounts, bringing the total to 15.3%.4Office of the Law Revision Counsel. 26 U.S.C. 3111 – Rate of Tax
The Social Security portion applies only to wages up to an annual cap. For 2026, that cap is $184,500.5Social Security Administration. Contribution and Benefit Base Earnings above the cap are still subject to the 1.45% Medicare tax, and single filers earning more than $200,000 pay an additional 0.9% Medicare surtax on wages above that threshold.
Estate and Gift Taxes
The IRS collects the federal estate tax on the total value of a deceased person’s assets before they pass to heirs. For 2026, estates valued at $15,000,000 or less are exempt. The agency also administers the federal gift tax, which covers large transfers made during a person’s lifetime; you can give up to $19,000 per recipient per year without triggering any reporting requirement.6Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 About a dozen states also impose their own estate or inheritance taxes, often with much lower exemption thresholds.
Federal Fuel Taxes
The IRS, not the TTB, collects federal excise taxes on gasoline and diesel. The federal gas tax has been 18.4 cents per gallon since 1993, and diesel is taxed at 24.4 cents per gallon. Fuel producers and distributors pay these taxes, and the cost is built into the pump price. Most of the revenue flows into the Highway Trust Fund.
Business Identification
The IRS issues Employer Identification Numbers to businesses, nonprofits, estates, and trusts. An EIN works like a Social Security number for your business and is required for hiring employees, filing business returns, and opening business bank accounts.7Internal Revenue Service. Employer Identification Number
State Revenue Agencies
Every state runs its own tax collection agency independently of the IRS. These agencies go by different names depending on the state: Department of Revenue, Franchise Tax Board, Department of Taxation, or Comptroller’s Office, among others. Each state legislature writes its own tax code, so rates, exemptions, and filing rules differ significantly from one state to the next.
State Income Tax
Most states collect a personal income tax on what you earn within their borders. Eight states impose no individual income tax at all. Among the rest, some use a flat rate and others use graduated brackets. Many states start from the federal definition of taxable income but add their own deductions and credits. Businesses operating in a state typically owe a separate corporate income tax or franchise tax.
State Sales Tax
Sales tax is a major source of state revenue. Five states have no statewide sales tax; the rest generally charge between about 4% and 7.25% on retail purchases. After the Supreme Court’s 2018 decision in South Dakota v. Wayfair, Inc., states can require out-of-state online sellers to collect and remit sales tax once the seller crosses certain economic thresholds, commonly $100,000 in annual sales or 200 transactions within the state, even without a physical presence there.8Supreme Court of the United States. South Dakota v. Wayfair, Inc. Every state with a sales tax has since adopted an economic nexus standard.
Local Governments
Counties, cities, municipalities, and school districts collect taxes to fund public schools, law enforcement, road maintenance, and waste management. Property taxes are the largest local revenue source.
Property Tax
Local assessors determine the value of homes, commercial buildings, and, in some jurisdictions, personal property like vehicles or equipment. A tax rate is applied to that value, often expressed as a millage rate meaning dollars per $1,000 of assessed value. You typically receive the bill once or twice a year from the county treasurer or a similar local official. Rates vary widely depending on the community’s budget needs and its tax base.
Local Sales and Use Taxes
Many cities and counties add a local sales tax on top of the state rate. These add-ons typically range from 0.5% to about 3% and fund city services such as public transit, parks, or infrastructure. Some jurisdictions also impose use taxes, which apply when you buy taxable goods from an out-of-state seller that did not collect sales tax at the point of sale.
Special Assessments
Some areas create special taxing districts, such as business improvement districts or community development districts, that levy separate charges on property within their boundaries. These assessments fund specific improvements like street lighting or stormwater systems and appear as line items on your property tax bill.
The Alcohol and Tobacco Tax and Trade Bureau
The Alcohol and Tobacco Tax and Trade Bureau (TTB) is a separate Treasury bureau, distinct from the IRS.9Alcohol and Tobacco Tax and Trade Bureau. About the Alcohol and Tobacco Tax and Trade Bureau TTB collects federal excise taxes on a narrow list of products: beer, wine, distilled spirits, tobacco products, and firearms and ammunition. Small cigarettes, for example, are taxed at $50.33 per 1,000 units, or about $1.01 per pack of 20. Pistols and revolvers carry a 10% tax on the sale price, and other firearms and ammunition are taxed at 11%.
These rates are set by statute and apply to manufacturers and importers, not individual consumers.10Alcohol and Tobacco Tax and Trade Bureau. Tax Rates Businesses in these industries must obtain a federal permit from TTB before operating and keep detailed records for audits.11Alcohol and Tobacco Tax and Trade Bureau. Qualify with TTB TTB’s collection procedures are governed by 27 CFR Part 70.12eCFR. 27 CFR Part 70 – Procedure and Administration
U.S. Customs and Border Protection
U.S. Customs and Border Protection (CBP) collects customs duties, tariffs, and fees on goods imported into the United States.13U.S. Customs and Border Protection. Revenue The agency is better known for border security, but revenue collection is part of its core mission.14U.S. Customs and Border Protection. Trade
Duty rates come from the Harmonized Tariff Schedule, a classification system that assigns a specific rate to each product based on what it is and where it was made.15United States International Trade Commission. About Harmonized Tariff Schedule Importers must classify their goods correctly and pay any duties before the merchandise clears customs. Misclassification, whether from error or evasion, can bring monetary penalties, seizure of the shipment, or both.16U.S. Customs and Border Protection. Penalties Program
Historically, imports valued at $800 or less qualified for a duty-free “de minimis” exemption under Section 321 of the Tariff Act. As of early 2026, the federal government has suspended that exemption for virtually all shipments regardless of value or country of origin.17The White House. Continuing the Suspension of Duty-Free De Minimis Treatment for All Countries Even low-value packages shipped directly to consumers are now subject to applicable duties and fees.
Unemployment Taxes: A Federal-State Split
Unemployment insurance is funded through both federal and state collection. The IRS collects the Federal Unemployment Tax Act (FUTA) tax from employers. FUTA is set at 6.0% on the first $7,000 of each employee’s annual wages, but employers who pay their state unemployment taxes on time get a credit of up to 5.4%, cutting the effective federal rate to 0.6%, or roughly $42 per employee per year.18U.S. Department of Labor. Unemployment Insurance Tax Topic If a state has outstanding federal unemployment trust fund loans, that credit may be reduced.19Internal Revenue Service. FUTA Credit Reduction
Each state also runs its own unemployment program and collects a separate state unemployment tax (often called SUTA) from employers. State taxable wage bases range from $7,000 in some states to over $60,000 in others, and rates vary based on an employer’s layoff history. State workforce agencies handle these collections.
Federal Deadlines and Payment Options
Federal individual income tax returns for 2025 are due by April 15, 2026. You can request an automatic extension to October 15 to file, but any tax owed is still due by April 15; the extension delays the paperwork, not the payment.20Internal Revenue Service. Individual Tax Filing
Self-employed people and others with income not subject to withholding generally owe quarterly estimated payments on these dates:
- April 15, for income earned January through March
- June 15, for income earned April through May
- September 15, for income earned June through August
- January 15 of the following year, for income earned September through December
When a deadline falls on a weekend or federal holiday, the due date shifts to the next business day.21Internal Revenue Service. Estimated Tax
Businesses can use the Electronic Federal Tax Payment System (EFTPS) to schedule income, employment, estimated, and excise tax payments up to 365 days in advance.22Internal Revenue Service. EFTPS: The Electronic Federal Tax Payment System Individual taxpayers are now directed to pay through their IRS Online Account for most tax types, though existing EFTPS users can continue with that system. State and local agencies each maintain their own payment portals and deadlines, which you can find through your state revenue department or county treasurer’s office.