In states where the tax is on the seller, it is customary for the seller to demand reimbursement from the buyer. In either case, the seller files returns and remits the tax to the state. States imposing sales tax either impose the tax on retail sellers, such as with Transaction Privilege Tax in Arizona, or impose it on retail buyers and require sellers to collect it. Sales taxes, including those imposed by local governments, are generally administered at the state level. Most jurisdictions exempt food sold in grocery stores, prescription medications, and many agricultural supplies. The purchase of goods for further manufacture or for resale is uniformly exempt from sales tax. Nearly all jurisdictions provide numerous categories of goods and services that are exempt from sales tax, or taxed at reduced rates. The definitions of retail sales and taxable items vary among the states. In cases where items are sold at retail more than once, such as used cars, the sales tax can be charged on the same item indefinitely. Unlike the value added tax, a sales tax is imposed only at the retail level. Use tax is self-assessed by a buyer who has not paid sales tax on a taxable purchase. The seller collects it at the time of the sale. Sales tax is calculated by multiplying the purchase price by the applicable tax rate. Including county and city sales taxes, the highest total sales tax as of September 1, 2013, was in Arab, Alabama, 13.50%. California has the highest base sales tax rate, 7.25%. States may grant local governments the authority to impose additional general or selective sales taxes.Īs of 2017, 5 states ( Alaska, Delaware, Montana, New Hampshire and Oregon) do not levy a statewide sales tax. 45 states, the District of Columbia, the territories of Puerto Rico, and Guam impose general sales taxes that apply to the sale or lease of most goods and some services, and states also may levy selective sales taxes on the sale or lease of particular goods or services. Sales tax is governed at the state level and no national general sales tax exists. Sales taxes in the United States are taxes placed on the sale or lease of goods and services in the United States. 12% State & Local Sales Taxes (2021) Median household income and taxes State & local sales taxes average
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