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What is sales tax?

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Quick Answer

Sales tax is a tax imposed on retail goods and services at the point of sale, explains Investopedia. Sales tax rates are different in every state. As of 2014, the states of Alaska, Montana, New Hampshire, Delaware and Oregon do not impose a sales tax, according to DailyFinance.

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Full Answer

Sales tax is a direct tax paid by the consumer and collected by a retailer who passes it on to the state, notes Investopedia. The tax is imposed at the time of transaction and set as a percentage of the value of the product or service. The rate is established by the state in which the transaction takes place.

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