Tax-Free Shopping?

I've read about 10 posts about tax free shopping (including the one on this website) and I still don't understand...
Basically it's telling me I don't need to pay for sales tax after a certain amount of money is spent? That doesn't make sense lol... As an American, everything is taxed...so how does this happen?
For example, when I go to 109 in Shibuya and spend \80000 on a lot of clothing, before I leave I can go to a customer service desk/tax free desk of some sort with my US Passport and they will give me money back. I shop in other areas, spend a lot of money on more clothes elsewhere and do the same thing and get refund....then, I return to USA with all the clothing and shoes and make up I've bought and just enjoy my haul? No action besides declaring that I've bought x amount of goods and ofc they're not to be sold when I re-enter USA...?

I am also an American, I've been living in Japan for about 4 months now. I didn't learn about tax free shopping until about 2 months in and I don't really use it because it's too much of a hassle to bring my passport everywhere I go shopping.
That said, for tourists, it's really convenient. I'm not entirely sure how it works logistically, but since you aren't a Japanese citizen, Japanese law allows you to opt out of sales tax if you spend more than 5000 Yen (I think) or about $40 USD. You do also need to show your passport to prove that you're not a Japanese citizen so you would need to carry it around with you. Again, that's more convenient for tourists, I have a residency card that acts as my ID but for tourists your passport is your valid form of ID which you should be carrying around anyways.
Not all stores are tax free, tax free stores will have a tax free logo on them with red flowers to signal that they are, indeed, tax free.
I hope this helps. In short, Japan is just really focused on making sure that things are as convenient as possible for everyone. As Americans, this can be really confusing, but there's no catch, no hidden fees, just enjoy your time here!

@Marty, as far as I know as a resident you aren�ft entitled to tax free shopping

&OP, essentially there are two ways this works
1) when you pay in the shop (if it is a tax free shop, they will have a small sign or you can ask) they will deduce the tax amount immediately. Maybe you�fll need to go to a special counter or just at the cashier.
2) you pay the full price but get a piece of paper staples to your passport and at the airport there are tax free offices where you get your money back. In my memory it�fs a transfer to your account or credit card.

I have used both methods and I think it depends on the shop. Same also works in Europe (and I vaguely remember in the US). As long as you aren�ft a resident and bring the things you bought back with you.
I do remember that what you bought should still be in its original wrapping when you leave the country (although I don�ft think many people do respect that) amd you definitely must bring it back with you. Ie you can�ft buy it for a friend in Japan. I remember once that I got checked. I think on the flight back from Spain to Japan (back then I was a resident in Japan, but went to Europe for holidays).

GST / VAT / Tax is just something a region imposes on goods and services that aren't gonna be used within the country.

Some regions allow to to bypass these taxes. Hence the tax free.

USA also allows visitors to do some tax free also.

I'm judging by your questioning that you weren't really aware of this. Worth learning how you own tax system/s work and the it is easier to understand the differences of others.

Just because Japan doesn't impose a sales tax above a certain amount for items that won't be consumed/used in Japan, it doesn't mean you won't be hit with import duties in the US if you surpass your individual quota. You must declare items purchased overseas when you arrive in the US. Many don't and just chance it that Customs won't catch you. But if they do, confiscation of such items can happen as punishment. Most likely you would have to pay the import duties and then a fine.

In Japan, duty free shopping often comes with easier procedures for travelers, compared to some other countries.

For example, when I (Japan resident) went to Thailand, at the shop I paid the taxes, had to get the shop to write a piece of paper, showed my passport, and get the papers ready to be shown at the departing airport (along with the sealed merchandise), to get the taxes back. I had to do the same when traveling to some other countries in Europe too.

However, in Japan, some bigger retail establishments like electronics stores, department stores, and some high-end brand shops (where they have a lot of inbound shoppers) have their own �gduty free�h service counter, there you show your passport, say that you are a traveler, you are taking the merchandise home, and that�fs that. You don�ft have to pay taxes. And at the airport they don�ft check that you are taking out the merchandise either.

This is one background how the other day Apple in Japan got caught by the Japanese tax authorities for failing to pay consumption taxes on some sales made, because they sold like 100s of iPhone to one person who claimed that they were for �gpersonal use�h outside Japan, but they actually resold them. So this system has to be fixed.

But yes if it is for genuine personal use back home, things are as you described - easy.

As the poster immediately above me says, be mindful of the �gimport�h taxes (if applicable) when you import the merchandise into your country.

And it is important to be aware not all shops offer tax free shopping, even when owned by the same company, see the many Pokemon Stores. Some offer tax free shopping and some do not.

You have to spend a lot of money or buy very specific items to get hit with any duty taxes when coming back to the US.
https://help.cbp.gov/s/article/Article-246?language=en_US

Good luck!