Sales Tax is a tax imposed as a proportion of consumer spending on specified goods or services that has to end up in the hands of the governing body.
The tax is the portion of the presumed profit the sellers have to pay the government or the governing body for the products sold. Sellers have the approval to have their consumers or buyers pay a portion or the entirety of the amount regulated as the sales tax.
Government imposes consumption tax on the sales of products and services and they differ dependant on certain factors associated with the products concerned.
There is a formula to calculate the sales tax and that depends on the cost of the product or service you are selling and the current tax rate in your sales area. The formula to calculate the sales tax -
Total Sales Tax = Cost of Item x Tax Rate
Types of Sales Taxes
There are a few kinds of sales taxes that are imposed on sellers around the world and they are -
- Wholesale Tax
- Manufacturer’s Tax
- Retail Tax
- Use Tax
- Value Added Tax
Use of the Term in Sentences
- Sales Taxes differ from product to product and the amount varies between states or and countries.
- The end-user or consumer of a product or service is charged with retail sales taxes.