Understanding Sales Tax Blog Posts

A History of Taxes in America

May 16, 2017

Living anywhere in the United States means paying all sorts of taxes, from income tax to sales tax, and indeed, the struggle for US independence began largely because of a dispute over taxes levied on colonists by the British government. Taxes play an important role in the functioning of our society, of course, as they allow for the construction and maintenance of facilities and institutions no individual citizens could pay for on their own but which everyone needs. Throughout the history of this country, taxes have come in different forms and have been used in different ways, and they’ve often… Read More

Teaching Kids About Sales Tax

May 8, 2017

For kids, it can be very exciting to save up allowance or birthday money and then take it to the store to buy a toy they’ve been eyeing for weeks. But it can also be confusing when they get to the register and find that the total cost is more than the price that was listed on the shelf. As adults, of course, we know that this difference reflects the sales tax added onto the item, and we’ve gotten so used to it simply being a fact of life that it can be hard to explain exactly what it is… Read More

What Is Sales Tax Revenue Spent On?

April 10, 2017

Except for in five states, customers in the US will pay sales tax on many goods and services they purchase. Even in those states without a statewide sales tax, certain items are still taxed, and local governments may be allowed to impose their own sales taxes if they wish. Of course, there’s a reason that sales taxes are so widespread, and that’s because they raise a lot of revenue for the states. Many states, although not all, have income taxes as well, and so sales tax isn’t their only source of revenue. However, economic downturns can cause revenue from income… Read More

Who Actually Imposes Sales Tax?

March 28, 2017

If you operate a business selling taxable goods or services, you almost certainly need to collect sales tax from your customers. However, sales tax rates and regulations vary a great deal from state to state, and this can become even more complicated if you sell in multiple states or ship items from one state to customers in another. When trying to determine what to charge and when, the first thing you need to understand is who imposes the tax in the first place. States In general, the bulk of the sales tax rate in any given location is imposed by… Read More

Why is Sales Tax Considered a Regressive Tax? (Infographic)

March 16, 2017

Ever heard the term "regressive tax"? Maybe not. But it refers to a tax that is unfairly imposed more strongly on lower income families. Sales tax is regressive. Why? Because people who earn less pay a larger percentage of their salary in the form of sales tax, as compared to those who earn more. In fact, based on percentage of salary, people in the lowest bracket pay more than DOUBLE what the top 1% pay. Compare that to income tax, where (not counting deductions), the rich pay a higher percentage than the poor. Income tax is called a "progressive tax",… Read More