Sales Tax
A consumption tax applied at the final point of sale to the end consumer.
Sales tax is a consumption tax charged on the retail sale of goods and, in some cases, services. Unlike VAT, which is collected incrementally at each stage of the supply chain, sales tax is levied only once — at the final sale to the consumer. The United States is the most prominent user of sales tax, where rates are set at the state and local level rather than nationally, producing thousands of different combined rates across jurisdictions.
Examples
- California has a base state sales tax of 7.25%, with local additions pushing some areas above 10%.
- Five US states — Alaska, Delaware, Montana, New Hampshire, and Oregon — levy no statewide sales tax.