sales tax

noun

Definition of sales tax

: a tax levied on the sale of goods and services that is usually calculated as a percentage of the purchase price and collected by the seller

Examples of sales tax in a Sentence

Recent Examples on the Web

Every year in July and August states across the country participate in a tax-free weekend that nixes the sales tax on essentials like clothing, school supplies, books, computers, and more. Lindsey Murray, Good Housekeeping, "Everything You Need to Know About Your State's Tax-Free Weekend," 27 July 2018 But the municipalities would lose authority over things like sales tax, courts and police. Jim Salter, The Seattle Times, "Nonprofit group proposes merging St. Louis city with county," 28 Jan. 2019 Construction goods and building supplies have been a major source of sales taxes, City Manager Jack Griffin said, as the region has seen an uptick in housing construction. Deborah Sullivan Brennan, sandiegouniontribune.com, "San Marcos passes $77 million budget, adds a new school resource officer," 14 June 2018 In a 5-4 decision released June 21, the majority ruled that states can require online retailers with no physical presence in the state to collect and remit sales taxes. Thomas Novelly, The Courier-Journal, "Mitch McConnell's high court reigns supreme again on Trump travel ban," 26 June 2018 Many online businesses had benefited from the 1992 ruling in Quill v. North Dakota that said states could only collect sales taxes from online merchants that had a physical presence within their borders. Matt Ford, The New Republic, "The Supreme Court’s Wayfair ruling is big for state budgets, bad for e-commerce companies.," 21 June 2018 That ruling limited the ability of states to collect sales taxes only from vendors that have a physical presence in that state. Jon Chesto, BostonGlobe.com, "In Wayfair case, Supreme Court to let states collect Internet sales tax," 21 June 2018 Historically, these merchants have decided when and if to charge sales tax to Amazon customers. Jason Del Rey, Recode, "Why Amazon’s retail dominance won’t be disrupted by the Supreme Court’s big tax ruling," 21 June 2018 States can now collect sales taxes from most online stores, a Supreme Court ruling said Thursday. Caroline Blackmon, Detroit Free Press, "What the Supreme Court's sales tax ruling means for Michigan," 21 June 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'sales tax.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of sales tax

1921, in the meaning defined above

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Dictionary Entries near sales tax

salesroom

sales slip

sales talk

sales tax

saleswoman

salet

saleyard

Statistics for sales tax

Last Updated

18 Apr 2019

Look-up Popularity

Time Traveler for sales tax

The first known use of sales tax was in 1921

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More Definitions for sales tax

sales tax

noun

Financial Definition of sales tax

What It Is

Sales tax is a consumption tax levied on goods and services purchased at the retail level, paid by the consumer and submitted by the retailer to the governing tax authority.

How It Works

In the United States, the sales tax is imposed on retail items. It is paid by the consumer to the retailer, usually as a percentage of the retail cost, who submits the payment to the state.

Sales tax rate and application varies dependant on the state. Sales tax can be applied by counties, cities and regions in addition to the state sales tax.

[InvestingAnswers Feature: The Most Important Tax Changes to Know Before Filing Your Tax Return]

Why It Matters

The imposition of this tax affects the consumer directly on each purchase for nonexempt goods and services. Some consumers may find it advantageous to "cross the border" to pay less taxes than in their home state for larger purchases.

The Organization for Economic Cooperation and Development (OECD) has found that sales taxes are one of the least harmful types of taxes for the economy; they minimally hinder growth and investment.

Many consider sales tax to be regressive, as it is a larger burden and percentage of income for low-income earners.

The only federal sales tax was imposed in 2010 via the health care reform law which taxes a 10% federal sales tax on indoor tanning services.

[InvestingAnswers Feature: How to Avoid an IRS Audit]

Source: Investing Answers

sales tax

noun

English Language Learners Definition of sales tax

: a tax that is added to the price of goods and services

sales tax

noun

Kids Definition of sales tax

: a tax paid by the buyer on goods bought

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sales tax

noun

Legal Definition of sales tax

: a tax levied on the sale of goods and services that is usually calculated as a percentage of the purchase price and collected by the seller

More from Merriam-Webster on sales tax

Rhyming Dictionary: Words that rhyme with sales tax

Britannica.com: Encyclopedia article about sales tax

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