Stupid question about sales tax
- Thread starter Phlegmak
- Start date
It's a tax on the transaction that is the seller's responsibility to collect and remit, so ultimately, it is a tax on the seller, since the taxing agency will go after the seller, not the buyer if it goes unremitted.
Fifty
!!!!!!!!!!!!!!!!!!!!!!!!!
BOTH
TEN CHARACTERS
TEN CHARACTERS
Correct....
Fifty
!!!!!!!!!!!!!!!!!!!!!!!!!
Both seller and buyer pay for it though!
Doesn't this belong here?
http://forums.civfanatics.com/showthread.php?t=220890
http://forums.civfanatics.com/showthread.php?t=220890
Most importantly, it's a barrier to trade and ensures that goods are not traded for at the proper price. Even if society can determine the worth of a good, the good won't trade for that worth. The vendor will get less than the good is worth and the customer will probably pay more than the good is worth (depending on the elasticity of the price).
So, a sales tax prevents a proper distribution of goods among the populace.
Sales taxes tend to be a regressive tax, and a selective application of taxes can mold consumer behaviour.
So, a sales tax prevents a proper distribution of goods among the populace.
Sales taxes tend to be a regressive tax, and a selective application of taxes can mold consumer behaviour.
MOTH
Emperor
Most sales taxes in the US are actually written as a "Sales and Use Tax". As such it is usually a tax on the Consumer.
I live in Massachusetts which has a 5% sales tax. I bought a boat in Mass and paid 5% to the state. I then brought the boat to Maine which has a 6% sales tax. I needed to pay the state of Maine an additional 1% as the difference is covered under the Use Tax portion of the law.
Additionally, New Hampshire has no Sales Tax. If I purchase a TV in NH then there is a place on my Mass Taxes where I am required to pay the state of Mass 5% of the purchase price **IF I USE** the TV in Mass. Most people completely ignore this and pay no use tax. This Use tax also applies to anything I purchase on the Internet and use in Mass.
I live in Massachusetts which has a 5% sales tax. I bought a boat in Mass and paid 5% to the state. I then brought the boat to Maine which has a 6% sales tax. I needed to pay the state of Maine an additional 1% as the difference is covered under the Use Tax portion of the law.
Additionally, New Hampshire has no Sales Tax. If I purchase a TV in NH then there is a place on my Mass Taxes where I am required to pay the state of Mass 5% of the purchase price **IF I USE** the TV in Mass. Most people completely ignore this and pay no use tax. This Use tax also applies to anything I purchase on the Internet and use in Mass.
Masquerouge
Deity
Mmmh if it works like in France, what happens is that actually businesses are just collecting agents for the sales tax. At the end of the month, they check the sales tax they paid on stuff they bought, and the sales tax they received on stuff they sold, and they send the difference to the state - or, more rarely, they get a refund from the state.
This means that ultimately the burden of the sales tax is on the consumer.
Fugitive Sisyphus
Escape Artist
Wow. I think that's ridiculous. Remind me to move to New Hampshire and never leave.
Stolen Rutters
Deity
Most states have a sales and use tax. It is not a federal thing.
I hear Michigan is like Massachusets the way it was described in post 8 above, but I don't know anybody who has ever actually paid use tax. I have to assume it is being collected at the point of sale by the internet vendor.
So far, internet sellers have charged tax 100% of the time I buy over the internet (like two to three times per year), so I don't worry... whether they are actually remitting it to the state of Michigan is on them.
I hear Michigan is like Massachusets the way it was described in post 8 above, but I don't know anybody who has ever actually paid use tax. I have to assume it is being collected at the point of sale by the internet vendor.
So far, internet sellers have charged tax 100% of the time I buy over the internet (like two to three times per year), so I don't worry... whether they are actually remitting it to the state of Michigan is on them.
Maimonides
Emperor
The sales tax is payed by the consumer. The seller is responsible for collecting it & sending it to the applicable government. The sales tax only occurs at the point the goods or services reach the consumer. When a seller sells to another seller, there is no sales tax.
Wrong, wrong & wrong.
There is, currently, no federal sales tax in the U.S., although it's being considered by some. Most states have a sales tax. Almost all counties & cities have a sales tax. Cities & counties use them to pay for specific projects or basic services. States use them to landscape the governor's mansion.
NKVD
Cossack
so if you buy a 200,000$ winnebago in the USA you have to pay the use tax in every states you go?! lol
In theory, yes. In practice, no.
Also, for all practical purposes, it doesn't matter. Either way, it acts as a price increase for the buyer, lowering the quantity demanded, and a price decrease for the seller, lowering the quantity supplied. Which effect predominates depends on the elasticity of the market, not the legalese of whether it's a tax on the seller or the buyer.
Fifty
!!!!!!!!!!!!!!!!!!!!!!!!!
Nope! It's payed by both, regardless of whether it is a tax "on the consumer" or "on the seller"! Learn some friggen economics, grocery boy.
searcheagle
Emperor
Originally Posted by Maimonides The sales tax is payed by the consumer. The seller is responsible for collecting it & sending it to the applicable government. The sales tax only occurs at the point the goods or services reach the consumer. When a seller sells to another seller said:
Masquerouge
Deity
Aaah so there is a difference between the US and at least France - but I guess Europe.
In Europe it works that way.
Say you're a retailer, and the VAT tax in your country is 20% (makes calcuations easier
).You buy, say, 1,000 units of good A to your wholesellers (wholesalers?). Net price is $1,000 per unit, with the 20% VAT tax you'll pay $1,200, so a total of $1,200,000, $200,000 of which is VAT you paid.
Then you sell these units to consumers for $2,000 net, $2,400 with VAT (VAT is always included in the listed price in Europe). It means you got $2,400,000 in sales, of which $400,000 are VAT customers paid you.
Now to know how much VAT you need to pay the state, you calculate the difference between the VAT you paid and the VAT you got, in this case, $200,000, and that's what you send to the state.
Basically, you're acting as a VATax-collector for the state. The VAT is applied on every transaction where there is a profit made (like a wholesaler selling to a retailer), but because you substract from that the VAT you received from your customers, then the final burden is on the consumer.
Maimonides
Emperor
No. You pay the tax in the city/county/state where you buy it & the state where you register it (if it's different). I bought one of my cars in Missouri, but registered it in Kansas where I live. I payed the tax in Missouri & another tax when I registered it in Kansas. I would have been better off buying it in Kansas, but I have a good relationship with the dealer.The states of the U.S. have agreements with each other so that a car registered in one state is welcome in another as is a driver's license. You have to register your car in the state in which you reside. If you have multiple residences, you can register cars in multiple states.
Taxes on the seller are not sales taxes. They come in forms like property tax, corporate or personal income tax & licensing fees. The consumer ultimately pays for them.
What's with the "grocery boy" personal attack? I like the Kramer character, too.
Ahhh. In that case, Fifty is OT. The OP isn't asking about the broader economic implications.
It is true that retail businesses are loathe to open shop in places with a high sales tax. Some communities thrive economically simply because they have a low sales tax. It brings shoppers from miles around. This is all OT for this thread, though.
Aaah so there is a difference between the US and at least France - but I guess Europe.
In Europe it works that way.
Say you're a retailer, and the VAT tax in your country is 20% (makes calcuations easier
You buy, say, 1,000 units of good A to your wholesellers (wholesalers?). Net price is $1,000 per unit, with the 20% VAT tax you'll pay $1,200, so a total of $1,200,000, $200,000 of which is VAT you paid.
Then you sell these units to consumers for $2,000 net, $2,400 with VAT (VAT is always included in the listed price in Europe). It means you got $2,400,000 in sales, of which $400,000 are VAT customers paid you.
Now to know how much VAT you need to pay the state, you calculate the difference between the VAT you paid and the VAT you got, in this case, $200,000, and that's what you send to the state.
Basically, you're acting as a VATax-collector for the state. The VAT is applied on every transaction where there is a profit made (like a wholesaler selling to a retailer), but because you substract from that the VAT you received from your customers, then the final burden is on the consumer.
There is one example I can think of in the U.S. that is similar to this, but it's not intended as a value added tax. Retailers pay a tax on tobacco products when we buy them from the wholesaler. In Kansas, it's currently $11.90 per carton of cigarettes. The wholesaler collects it & remits it to the state. The retailer figures it into the retail price & then the normal sales tax is added at consumer purchase.
States have been adding & increasing these taxes to pay for health related expenses caused by smoking. The unofficial reason is that it props up the price of cigarettes making them less affordable.
boarder
King
I found this sales tax really annoying,Id never know how much anything was, like here you can go up with the exact change if you want whereas in the states I would say order a feed and it says such and such and you go to pay and you havent got enough on you as its more then it says it is.
I guess if you lived there or where there for long enough you get used to it, but why not just have the price of something and include sales tax I really don't get it???
I guess if you lived there or where there for long enough you get used to it, but why not just have the price of something and include sales tax I really don't get it???
Maimonides
Emperor
Perhaps because the sales tax rates change frequently. What you describe can be a pain. Most people get used to it though.
Some businesses here do include the sales tax in their pricing for the reason you describe.
Some businesses here do include the sales tax in their pricing for the reason you describe.
