Q:

What are some reasons states have sales tax?

A:

Quick Answer

States collect sales taxes to raise revenues that fund community development, public services, protective services and special projects, according to the Houston Chronicle. The majority of states charge a sales tax assessed on the purchases of good or services. A local district tax often accompanies the state rate.

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Full Answer

Part of the sales tax goes toward developing community projects such as public buildings, roads and infrastructure renovation, explains the Houston Chronicle. Such projects are not commonly the primary benefactors of sales tax revenue, as often other items receive higher priority. A large portion of sales taxes fund public services and venues such as public education, parks and libraries. Budgets established for these services ensure that each gets its proper share of the sales tax revenue.

Protective services such as police and fire departments also receive funds from sales tax revenue, reports the Houston Chronicle. State or local areas may also need specialized protective services at different times. Some communities attempt to save funds with volunteer fire departments, but these stations still need inventories stocked with engines and other supplies. Protective services take up a large part of the sales tax revenue. Short-term special projects can also receive funding from sales tax revenue.

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