Definition

Noun: A tax levied by a government on the retail sale of goods and services. It is calculated as a percentage of the selling price and is collected directly from the consumer by the seller at the point of sale.

Usage

The term "sales tax" is used to refer to the specific tax added to the purchase price of most items. It is a common form of consumption tax. - The seller is responsible for collecting the sales tax and remitting it to the appropriate government authority. - The rate of sales tax can vary by jurisdiction (e.g., state, county, city).

Examples

Advanced Usage

• "Sales tax exemption": A status that allows certain entities (like non-profits) or purchases (like groceries in some areas) to be free from sales tax.
  • The school has a sales tax exemption certificate for educational materials.
• "Sales tax holiday": A designated period, often before the school year, when sales tax is temporarily suspended on specific items.
  • We bought our new laptops during the state's sales tax holiday.

Variants and Related Words

• Use tax: A complementary tax levied on goods purchased from out-of-state vendors where sales tax was not collected. The consumer is responsible for paying it directly to their home state.
• Value-added tax (VAT): A consumption tax levied on the value added to goods and services at each stage of production or distribution, common in many countries outside the United States. Unlike a sales tax, it is collected incrementally.

Synonyms

• Consumption tax: A broad term for any tax on the purchase of goods and services, which includes sales tax.
• Excise tax: A tax on specific goods (like tobacco or gasoline), often included in the price, which is related but distinct from a general sales tax.

Related Phrases

• "Tax-inclusive pricing": A pricing method where the displayed price includes all taxes, so the consumer pays exactly the advertised amount. This contrasts with most U.S. sales tax systems, where tax is added at the register.
  • In many European countries, prices are tax-inclusive, so what you see is what you pay.

Noun

1. a tax based on the cost of the item purchased and collected directly from the buyer