sales tax

sales tax
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 (VAT) is better for economic efficiency, a sales tax is much simpler to administer when a lot of the business being taxed is done by firms whose business spreads over several states.