A sales tax is a government-imposed tax on the sale of goods and services, typically calculated as a percentage of the purchase price and added to the final cost paid by the consumer. It is collected by the seller at the point of sale and then remitted to the state or local government
. Sales tax is considered an indirect tax because it is imposed on the business but ultimately paid by the consumer
. In the United States, sales tax is governed primarily at the state and local levels, with no federal general sales tax. Each state sets its own rates and rules, and local governments may add additional sales taxes on top of the state rate. The taxability of items varies by state, with some goods like groceries or prescription medicines often exempted, while luxury goods and many services are usually taxable
. Sales tax revenue is a significant source of funding for public services such as education, transportation, and healthcare
. Businesses are responsible for collecting sales tax from customers and remitting it to the appropriate tax authorities. Compliance can be complex due to varying regulations, rates, and taxability rules across jurisdictions
. In summary, sales tax is a consumption tax added to retail sales, collected by sellers, and used by governments to fund public services. Its rates and rules differ widely depending on the location and type of goods or services sold
