Things You Might Not Get Right About Sales Tax

What is sales tax?

A sales tax is the direct tax on the consumption of retail goods and services. But unlike income taxes, which are levied by the federal government, sales taxes are strictly imposed by state and local governments.

That means each state determines its sales tax rate and enacts it. Although the majority of states collect statewide sales taxes, there are several states that also impose a local sales tax. In total, 45 states and the District of Columbia have some type of sales tax.