What to Know About US Sales Tax

In the United States, sales taxes are imposed at the point of purchase, as a percentage of the purchase price. For example, an item that cost ten dollars may be taxed at a rate of 6 percent, or sixty cents. Those making purchases are aware ahead of time, what the tax burden will be, as the percentage of tax imposed is the same, regardless of the price of the item. While sales tax are imposed as a percentage of the purchase price, some items are tax exempt. In many tax jurisdictions, necessities, such as certain foods, are exempt from the sales tax. In most states, the sales tax is collected by they seller, who then forwards the tax monies to the government. However, there are some exceptions. For example, the buyer is responsible for an additional sales tax which applies to good purchased outside of the tax jurisdiction, but then used in their tax jurisdiction. For example, an individual that purchases clothes from one state, to be used on their state of residence, is responsible for an additional tax on those items, to be paid at the end of the year in most jurisdictions. Sales taxes are levied on most goods and services in the United Sates, depending on the jurisdiction. In addition, the percentage of sales tax levied in each jurisdiction varies. Sales taxes do not take the income of an individual into consideration and they are considered a regressive tax, because those with a lower income payer a higher amount, when taken as a percentage of their salary.

NEXT: Estate Tax