Sales tax
A sales tax is a tax added to the price of goods and services when they're sold. The seller collects it and pays it to the government.
🌍 In the real world
The US has no national sales tax. Most states and many cities set their own, so the combined rate depends on where you buy; the average combined rate is about 7.5%.
Everyone pays the same rate whatever their income, so a sales tax takes a bigger share of a poorer household's income. That's why many states exempt groceries.
Formula
Price with tax = price × (1 + tax rate)
Example
A $100 jacket with 7.53% sales tax costs $107.53.
🎮 In Journey Shares
Everything sold in the city's stores includes 7.53% sales tax, the average combined US state and local rate. It goes to the treasury. →
🧭 How to use it
Look at the price with tax before buying gear or a car in the city: the tax is part of what the item really costs. It also fills the treasury that pays for bank bailouts before any new money is printed.
🎮 Learn Sales tax the fun way
Try it in a live 3D city with play money: trade shares in real public figures, get margin-called, pay your taxes and rob a bot or two. Free, and nothing real is at stake.
❓ Common questions
Which US states have no sales tax?
Alaska, Delaware, Montana, New Hampshire and Oregon have no statewide sales tax, though some Alaskan towns charge their own.
How is a sales tax different from a VAT?
A sales tax is collected once, at the final sale. A value-added tax, used in most other countries, is collected at each step of production on the value added there.
📜 Where it came from
🔗 Related terms
- Tax bracket: A tax bracket is a range of income taxed at one rate.
- Fiscal policy: Fiscal policy is the government's use of spending and taxes to influence the economy.
- Deadweight loss: Deadweight loss is the value lost to society when a market produces less (or more) than the efficient quantity, often because of a tax, price control or monopoly.
- Price elasticity of demand: Price elasticity of demand measures how much the quantity people buy changes when the price changes.
Categories: Taxes
Practise with $10,000 in play money
Free. No real money involved.