Types of Transactions Subjected to Sales Tax:
There are several types of transitions that are subjected to the general sales tax. However, each tax jurisdiction makes specific and unique determinations as to the manner in which sales taxes are imposed. The regular sales tax is applied to purchases, as a percentage of the cost of an item. Merchandise purchases online may not be subjected to a sales tax at the point of purchase, if the company does not have a physical presence in the state where the item is being shipped.
However, the consumer is still required to pay the tax directly to their state. That tax burden however, only applies if the type of merchandise is normally taxed in that state. Each state taxes differing merchandise and imposes taxes at a different percentage of the sale price. In addition to the state sales tax, there are local sales taxes imposed in certain circumstances. Each local state tax must adhere to state and Federal tax restrictions.
Special Sales (Excise) Tax:
Special sales taxes are imposed as an excise tax on specific items. Included in those types of taxes are special sales taxes on cigarettes, alcohol and fuel.
Characteristics of Special Sales Tax:
There are several types of sales tax and there are also special sales taxes imposed on certain items. Those items are those that can cause harm to those consuming them, or to those exposed to them. For example, the cigarette excise tax is imposed because cigarettes harm smokers, as well as those exposed to the second hand smoke. The cigarette excise tax is used as a means to discourage purchase of cigarettes.
However, many people claim that the tax only discourages those with lower incomes, from purchasing cigarettes. Regardless, the revenue from the special excise taxes imposed on certain items, is generally used for public education campaigns. Those educational campaigns help to educate the public about the dangers associated with consumption of certain products.
In addition, the tax revenue is often used to help fund programs that help people quit, or to fund programs that treat the medical issues associated with smoking. The same is true for the excise tax on alcohol. That tax revenue is often used to help people in recovery programs, as well as campaigns to stop drunk driving.
Authorization and Administration:
Taxes in the United States continue to be a point of contention. Many United States citizens argue that, as a nation, we are overtaxed. There have been many arguments against taxation as it stands now. Due to the bad economy, many Americans are struggling to make payments and purchase basic necessities. For that reason, some have recommended a decrease in certain types of taxes. In fact, there are many arguments that support the idea of lowered taxes, to increase individual savings.
Later, those savings will include increased personal spending, and an increase in tax revenue. Conversely, there is an argument that taxes are a necessity, in order to aid the government in running a smooth operation. In fact, many arguments claim that lowering taxes would cause immense harm to an economy that is already suffering. In any case, Congressdue processFederal courts.