A state or local-level tax on the retail sale of specified property or services. It is a percentage of the cost of such. Generally, the purchaser pays the tax but the seller collects it as an agent for the government. Various taxing jurisdictions allow exemptions for purchases of specified items, including certain foods, services, and manufacturing equipment. If the purchaser and seller are in different states, a use tax usually applies.

The vast majority of states impose sales taxes on their residents. The only exceptions are Alaska, Delaware, Montana, New Hampshire, and Oregon. Some states rely more heavily on sales taxes for a significant portion of revenue. Tennessee, for instance, does not impose an INCOME TAX, so it relies heavily on sales taxes. The combined state and local sales taxes average about 9.25 percent per sale. The state of Michigan imposes a...