Sales Tax Law

Sales taxes are imposed at every level. They are included in federal, state, county and local municipality levels. Sales taxes are normally imposed only on the buying of goods. This means you do not need to pay any sales tax for services.

Great Income Tax

Permits and Rules for Tax Laws

Retailers and individuals who buy goods for sale to clients are generally able to get a permit, commonly known as a re-sellers permit, which gives them an option to purchase goods without paying any sales tax. The retailers, however, collect the sales tax on such goods when their clients buy the goods.

There is a wide array of rules with regard to what goods are subject to sales tax. For example, you may not need to pay any sales tax for food. On the other hand, a few goods, such as tobacco and gasoline are subjected to specific sales taxes. Sales taxes have widely been regarded as regressive taxes. In other words, individuals with low income tend to spend a huge part of their income in taxable sales as compared to higher income individuals.

Interstate Tax Issues

If you buy goods from an out-of-state vendor in the US you do not need to pay any sales tax, as your state may not have jurisdiction over the out-of-state vendor. However, to make up for the lost sales tax revenue, there is a good chance that your state will charge a use tax on you. For example, if you buy an LCD TV from a local retail store, you need to pay sales tax. However, if you buy LCD TV over the internet, sales tax may not apply to the sale but you owe a use tax because you bought an LCD TV. There are a few states that also charge a use tax on the in-state transfer of used goods like consumer goods and automobiles. Not all good and services are taxed in the US due to exemptions.

Corporate sales tax planning in the US consists of determination of methods to legally minimize the tax amount because of a transaction. There is also a review of company purchases in order to evaluate which assets can qualify for exemptions.