Sales tax

A sales tax is a tax paid to a governing body for the sales of certain goods and services. Usually laws allow (or require) the seller to collect funds for the tax from the consumer at the point of purchase. When a tax on goods or services is paid to a governing body directly by a consumer, it is usually called a use tax. Often laws provide for the exemption of certain goods or services from sales and use tax.

Conventional or retail sales tax is levied on the sale of a good to its final end user and is charged every time that item is sold retail. Sales to businesses that later resell the goods are not charged the tax. A purchaser not an end user is usually issued a "resale certificate" by the taxing authority and required to provide the certificate (or its ID number) to a seller at the point of purchase, along with a statement that the item is for resale. The tax is otherwise charged on each item sold to purchasers without such a certificate and who are under the jurisdiction of the taxing authority.

Other types of sales taxes, or similar taxes, include the following:

Most countries in the world have sales taxes or value-added taxes at all or several of the national, state, county, or city government levels. Countries in Western Europe, especially in Scandinavia, have some of the world's highest valued-added taxes. Norway, Denmark and Sweden have higher VATs at 25%, Hungary has the highest at 27% although reduced rates are used in some cases, as for groceries, art, books and newspapers.

In some jurisdictions of the United States, there are multiple levels of government which each impose a sales tax. For example, sales tax in Chicago (Cook County), IL is 10.25%, consisting of 6.25% state, 1.25% city, 1.75% county and 1% regional transportation authority. Chicago also has the Metropolitan Pier and Exposition Authority tax on food and beverage of 1% (which means eating out is taxed at 11.25%).

For Baton Rouge, Louisiana, the tax is 10%, which is 5% each of state & local. In L.A. it is only 8.75%, which is 7.25% state and 1.5% county.

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