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

For the second straight year, Santa Clara County Supervisor Cindy Chavez’s proposal to place a 5/8-cent sales tax increase on the ballot isn’t going anywhere. Thy Vo, The Mercury News, "Chavez drops sales tax hike bid, citing fellow supervisors’ lack of interest," 10 Sep. 2019 The bill would also require online marketplaces such as Amazon and Airbnb to collect sales taxes on behalf of those who sell products and services on their platforms. Patrick Marley, Milwaukee Journal Sentinel, "Key senator defends Tesla provision, gives Republicans enough votes to pass state budget," 26 June 2019 Greenberg pointed out that the department has been collecting more sales taxes in recent years. Russ Wiles, azcentral, "Sales taxes go uncollected, businesses slip through cracks under Arizona's business-friendly efforts," 13 June 2019 State governments may require online retailers to collect sales taxes even in states where the retailers have no physical presence, the US Supreme Court ruled in a decision issued today. Jon Brodkin, Ars Technica, "Get ready for more sales taxes on online purchases," 21 June 2018 In 1982, Connecticut tax officials agreed to let New York audit Connecticut companies in a crackdown on businesses that sold goods to out-of-state residents without collecting sales taxes. Sam Roberts, New York Times, "James H. Tully Jr., Former New York State Tax Chief, Dies at 87," 18 June 2018 This has led some large e-commerce companies to start voluntarily collecting sales taxes ahead of any formal regulation. Alex Paladino, Recode, "E-commerce companies don’t pay local sales taxes. They need to get serious about fixing that.," 17 Apr. 2018 Online shoppers may find their purchases will cost more if the Supreme Court does away with a decades-old ruling limiting the ability of states to collect sales taxes on out-of-state internet purchases. Bill Mears, Fox News, "States and online sellers do battle in tax dispute before Supreme Court," 17 Apr. 2018 The New York Times outlined earlier this week that Amazon has collected sales taxes since April 2017. Andrew Liptak, The Verge, "President Trump accuses Amazon of scamming the USPS," 31 Mar. 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

19 Sep 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

Comments on sales tax

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formidable, illustrious, or eminent

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