Overview

sales tax


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A tax on the sales of a business. A sales tax is normally a fixed percentage of total sales of some classes of goods and services. Sales taxes are used to raise revenue, for example, by some states of the US. While in principle a value-added tax is better for economic efficiency, a sales tax is much simpler to administer when much of the business being taxed is done by firms whose business spreads over several states.

Subjects: Economics.


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