Sales and Use tax in the United States

Sales tax is collected from the consumer of the goods and services by the seller and remitted to the appropriate government agency.  In economic term, it is called “indirect tax.” In the United States, the sales tax is collected at the state level and some local and county sales and use tax also applies. There is no sales tax at the federal or national level. The collection of sales tax constitutes a major source of revenue for the state governments in the United States.

There are five states which have no sales tax with some exceptions. These states are Alaska, Delaware, Montana, New Hampshire, and Oregon.

Some local authorities in Alaska are allowed to charge some small sales tax. Delaware imposes gross receipts tax on some businesses. As opposed to Alaska, Montana imposes resort and local option tax which is collected at the state level. New Hampshire also collects sales tax on some supplies and services at the state level. Oregon imposes sales tax only on certain goods and it can be collected by the local governments.