Sales Tax Bite #1: What Is Sales Tax?

The world of sales tax compliance is multi-layered and faceted. Each week, we want to take a look at some of the key factors about sales tax.

Today, let's take a look at "what is sales tax?"

According to the Tax Foundation, the nation's leading tax policy nonprofit, sales tax is, 

A sales tax is levied on retail sales of goods and services and, ideally, should apply to all final consumption with few exemptions.

So what does this mean for you as an individual person and business? It means that the final user of a product and/or service is required to pay tax. Depending on where you are located in the United States different exceptions may apply.

Do you live in Montana? There is no state wide sales tax.

Did you remodel a house in Washington state? You have an obligation to charge sales tax on your services.

Do you live in North Carolina? Your groceries are exempt from state sales tax - but you do have to pay local tax on your grocery purchase. 

Did you buy a new shirt on Amazon? Amazon will charge sales tax as they operate as a marketplace facilitator.

Constant change and nuances make sales tax dynamic and challenging in this modern world and finding the right advice and support is key. Osprey Tax is here to help.