Sales Tax
Also called: retail sales tax
What is Sales Tax?
Sales tax is a consumption tax added at the point of the final retail sale, most familiar from the United States, where state and local rates stack into one combined rate. Unlike VAT or GST, it is generally collected once rather than at every stage.
Why Sales Tax matters
Businesses billing customers in sales-tax jurisdictions need the combined rate for the buyer's location, which can differ street by street. Under-collecting leaves the seller carrying the shortfall.
Sales Tax formula
Sales tax = Price × combined tax rate ÷ 100
Combine state, county and city rates before applying them.
How Sales Tax works in practice
Apply the destination rate where the rules require it, keep exemption certificates for resale customers, and file by the frequency your registration specifies.
Frequently asked questions
It depends on the jurisdiction. Many tax goods broadly and services selectively.