Table of ContentsWhat is Sales TaxWho Charges Sales TaxHow the Tax Rate is DeterminedSupplier Responsibility for Collecting Sales TaxIn As consumers, most people are familiar with sales tax. When an individual consumer goes to a supplier, purchases items, and pays what is charged, the amount often includes sales tax on some items and not others. It is the supplier's responsibility to charge tax on taxable sales and not charge tax on exempt sales. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get an Original Essay Although many of the principles of sales tax that apply to an individual consumer also apply to business consumers, the business's handling of sales tax must take into account a number of other factors . One of the most important is that, unlike individuals, corporations are regularly audited by state tax authorities to verify that they are correctly paying their sales and using tax on their purchases. What is a sales tax? Sales tax is generally the largest source of revenue in the states where it is imposed. This is a tax imposed on the sale of taxable items and calculated as a percentage of the sales price. Who imposes sales tax A sales tax may be imposed by states or other local jurisdictions. Currently, the only states that do not impose sales tax are Alaska, Delaware, Montana, New Hampshire, and Oregon. All other states impose some form of sales tax. Because sales tax is imposed at the state level. States frequently apply the tax to support industries or commercial activities that represent a significant portion of the state's economy. In states where mining or manufacturing is a significant part of the economy, the tax may be structured to provide more favorable sales tax treatment for items purchased and used in these industries. How is the tax rate determined? The tax is owed to the state where the goods are produced. are delivered and used – commonly referred to as “destination” status. For example, if the customer visits a supplier's site and makes a purchase (a point-of-sale purchase), tax is collected at the sales tax rate in effect in the state where the supplier and the seller are located. buyer. If the buyer orders goods (i.e. telephone or internet order) and the purchase takes place in State A and the supplier is in State B, and the goods are delivered to the buyer in State A, then the transaction is subject to sales. tax in State A. The general rule for determining the correct rate to apply to a transaction is to apply the rate applicable in the destination State. Supplier Responsibility for Collecting Sales TaxSuppliers are only required to collect tax in states where they have nexus. Nexus is a legal term. Nexus describes the contact or presence a supplier may have with a state that allows the state to require the supplier to collect state sales tax. If the supplier has no relationship to the destination state, the state has no basis on which to exercise jurisdiction over the supplier and require it to collect sales tax. Keep in mind: this is just a sample. Get a custom paper now from our expert writers.Get a Custom EssayIn general, an out-of-state provider is considered to have nexus with a state for state tax purposes...