Sales taxes are much more important in the south and west than they are in New England and the industrial Midwest. Reliance on the sales tax varies widely by state. Sales tax provides nearly one-third of state government revenue and is second only to the income tax in terms of importance as a source of revenue. On average, the impact of sales tax on Americans is about 2 percent of their personal income. Rules and regulations regarding sales tax vary widely from state to state. These are only several examples of differences in taxation in different jurisdictions. Vermont has a 6% general sales tax, but an additional 10% tax is added to purchases of alcoholic drinks that are immediately consumed. In Texas, prescription medicine and food seeds are exempt from taxation. The sales tax rate ranges from 0% to 16% depending on the state and the type of good or service, and all states differ in their enforcement of sales tax. Unlike VAT (which is not imposed in the U.S.), sales tax is only enforced on retail purchases most transactions of goods or services between businesses are not subject to sales tax. States that impose a sales tax have different rates, and even within states, local or city sales taxes can come into play. These are Alaska, Delaware, Montana, New Hampshire, and Oregon. At the state level, all (including District of Columbia, Puerto Rico, and Guam) but five states do not have statewide sales tax. In the United States, sales tax at the federal level does not exist. In other countries, the listed prices are the final after-tax values, which include the sales tax. In some countries, the listed prices for goods and services are the before-tax value, and a sales tax is only applied during the purchase. In most countries, the sales tax is called value-added tax (VAT) or goods and services tax (GST), which is a different form of consumption tax. Usually, the vendor collects the sales tax from the consumer as the consumer makes a purchase. A sales tax is a consumption tax paid to a government on the sale of certain goods and services.
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