Sales Taxes, from Life in the USA: The Complete Guide for Immigrants and Americans

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Life in the USA
Personal Finance
Taxes

Sales Taxes
Sales taxes exist in most but not all states, and are much harder to avoid than income taxes. Merchants and service providers are responsible for collecting sales tax on purchases, preparing periodic returns, and sending the funds in to the state tax authorities.

Not all products and services are taxed. Often food and clothing is exempt, depending upon the state you're in. Many services, hotel rooms, gasoline and other items may be taxed, often at different or higher rates than those that apply to other goods and services.

In the USA, sales taxes are rarely included in the advertised price of goods and services. The purchaser, while not responsible for any paperwork, must always keep in mind that a purchase of, as an example, $100, will actually require an outlay of $105 or $107, depending on the local rate.

The subject is controversial, but Internet and mail-order catalog sales are often not subject to sales tax, especially if the merchant has no office in the state to which the goods are shipped. Keep in mind that additional shipping charges can easily eat up any sales tax savings.


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