ANSWERS: 1
  • Almost anything a person buys has a sales tax added to the price. However, rarely are people told exactly where this money goes. Sales-tax revenues are usually used for the public good; this can mean things such as a rail system, building new schools or emergency funds.

    Considerations

    Sales-tax rates differ from state to state and even between counties, according to the Federation of Tax Administrators. In addition, the states determine how they use the tax revenue.

    Identification

    Sales-tax money usually goes into a general fund for whatever the state needs, or to specific social services such as education funding, upkeep of public land or savings, according to the Missouri Department of Revenue.

    Types

    Sales taxes often have two parts: the state minimum sales tax and an optional county sales tax added to the state sales tax, according to the Converse County, Wyo., Treasurer's Office. States usually let counties keep most or all of any local sales tax to use as they see fit.

    Tips

    Many states have a tax holiday a few days out of the year, according to the Federation of Tax Administrators. During this holiday, the state eliminates tax on certain goods -- mostly essentials such as school supplies and clothes.

    Significance

    Sales-tax revenue makes up a large part of state and county budgets, especially in a state such as Texas, which doesn't collect a state income tax, according to the "Fort Worth Star-Telegram." When sales tax money drops, the state can't afford to pay for public servants and services.

    Source:

    Federation of Tax Administrators

    Missouri Department of Revenue: Sales/Use Tax

    Converse County, Wyo., Treasurer's Office: Where Does the Sales Tax Money Go?

    Resource:

    Federation of Tax Administrators: 2009 State Sales Tax Holidays

    Fort Worth Star-Telegram: As Shoppers Spend Less, Sales Tax Revenue Takes Big Hit

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