Sales Tax Blog
What Is Sales Tax Revenue Spent On?
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?
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)
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