sales tax


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 The tax reform package included reducing income taxes while raising sales taxes on food, gas and some services. USA TODAY, "Atari hotel, Wienermobile warning, goat mayor’s K-9 rival: News from around our 50 states," 29 Jan. 2020 Leaving the sales tax on fuel is a major obstacle to negotiating a road funding plan. Paul Egan, Detroit Free Press, "Here's how to solve one of Michigan's biggest road funding puzzles," 28 Jan. 2020 Under a new law that took effect this month, residents will not have to pay sales tax on diapers and feminine hygiene products. Tanya A. Christian, Essence, "California Makes Diapers And Feminine Hygiene Products Tax-Free," 9 Jan. 2020 As a hammer to force companies to negotiate, Pelosi would impose steep sales taxes on the medications at issue. Washington Post, "Pelosi sets Medicare showdown on drug costs and new benefits," 5 Dec. 2019 The case pitted a class of cell-phone customers against AT&T. The customers claimed they had been defrauded by advertisements promising them a free phone when, in fact, AT&T charged them $30 for sales tax on the phone. Brian T. Fitzpatrick, National Review, "The Conservative Case for Class Actions?," 13 Nov. 2019 But Orange County collects a bed tax for tourist development and sales tax on rental stays shorter than six months, comptroller Phil Diamond said. Caroline Glenn,, "Orlando apartments rent out Airbnb style, targeting tourists instead of tenants," 4 Nov. 2019 Under Schwarzenegger’s successor, Jerry Brown, the state raised taxes on residents making more than $250,000, and bumped up the sales tax a bit. Washington Post, Orange County Register, "This columnist thinks California is in big trouble. The fix? Kill Prop 13!," 22 Oct. 2019 For example, Ohio recently passed a proposal repealing the state's sales tax on menstrual products in the House with unanimous support. CNN, "The cost of tampons is hurting low-income girls. Let's fix that," 21 Oct. 2019

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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Time Traveler for sales tax

Time Traveler

The first known use of sales tax was in 1921

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Statistics for sales tax

Last Updated

21 Feb 2020

Cite this Entry

“Sales tax.” Dictionary, Merriam-Webster, Accessed 28 Feb. 2020.

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More Definitions for sales tax

sales tax


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


English Language Learners Definition of sales tax

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

sales tax


Kids Definition of sales tax

: a tax paid by the buyer on goods bought

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sales tax


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

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More from Merriam-Webster on sales tax

Thesaurus: All synonyms and antonyms for sales tax

Rhyming Dictionary: Words that rhyme with sales tax Encyclopedia article about sales tax

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