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 governor has included additional money in this year’s budget for municipalities that share services to improve efficiency as well as changes to force major online marketplaces, like Etsy , to collect sales tax on behalf of third-party sellers. Jimmy Vielkind, WSJ, "Cuomo’s Budget Proposal Cuts Aid to Municipalities," 16 Jan. 2019 Nine other states, including New York, Minnesota, and Illinois, have already eliminated sales tax on tampons. Anna North, Vox, "Nevada just got rid of its “tampon tax”," 7 Nov. 2018 Some Washington lawmakers in recent years have unsuccessfully proposed eliminating the sales tax on menstrual hygiene products. Daniel Beekman, The Seattle Times, "Seattle would consider exempting tampons from sales tax under City Council proposal," 30 Oct. 2018 Last year, shoppers could save up to $52.50 in 7 percent sales tax on each device purchased for noncommercial use. Doreen Christensen,, "Computers off the list during upcoming Florida back-to-school tax holiday," 11 July 2018 In a case involving Massachusetts online retailer Wayfair, the US Supreme Court Thursday opened the door for states to collect sales taxes on products their residents buy from Internet retailers in other states. Globe Staff,, "Read the Supreme Court’s full Internet sales tax ruling," 21 June 2018 As early as next week, the Cincinnati Reds could be one of very few Major League Baseball teams required to pay state sales tax on bobbleheads and other promotional items given away to fans before games at Great American Ball Park. Dave Clark,, "Ohio Supreme Court to consider whether Reds' giveaways should be taxed," 5 June 2018 Reforms are gaining traction, from states seeking to eradicate the sales tax on menstrual supplies (a.k.a., "Meghan Markle Has Championed Menstrual Equity — Here's Why You Should Too," 21 May 2018 For example, landlords might need to collect sales taxes on residential rentals in most larger Arizona cities, though this tax isn't commonly levied in other parts of the country. Russ Wiles, azcentral, "5 important tips for buying a rental property," 20 May 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


sales slip

sales talk

sales tax




Statistics for sales tax

Last Updated

21 Feb 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


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

More from Merriam-Webster on sales tax

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

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