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The Curious Bag
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Sales tax is a levy added to the sale of material goods and services in the form of a percentage of the purchase price. The U.S. Treasury Department identifies common goods in which sales tax applies, such as cars, clothing and movie tickets. Sales tax occurs commonly in the form of retail sales tax, gross receipts tax, value-added tax, excise tax and turnover tax.
Retail Sales Tax
End-user consumers pay retail sales tax in most U.S. states. Merchants collect sales tax and remit payments to their local governments.
Excise Tax
Sales tax is an important source of revenue for government. The U.S. Department of Treasury explains that excise tax, or luxury sales tax, applies to federal and state revenues. An example of excise tax is gasoline tax, which is used for highways, bridges and mass-transit systems.
Value-added Sales Tax
Value-added taxes are a form of all-inclusive sales tax that results in the consumer paying a higher price for a commodity, as it includes taxation of the product or service at every level of business production.
Turnover tax
Each time a commodity changes hands--as from manufacturer to wholesaler, from wholesaler to retailer or reseller--a transaction tax, called a turnover tax, is collected by the supplier and also paid to the government.
Gross Receipts Tax
A gross receipts tax is a form of tax applied to the gross revenues of a company over a specified period and is the responsibility of the merchant, reseller or supplier to pay to the government.
Source:
U.S. Department of the Treasury - Fact Sheets: Taxes
The Columbia Encyclopedia Online: Value-Added Tax
Institue on Taxation and Economic Policy: "Who Pays?" Analysis
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