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Comment by xxgsdzfwser | Hacker News Reader

No, the businesses are taxed, and they pass the cost to the consumer. The "sales tax" itemization the end of the receipt is for informational purposes only.

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Sales taxes are usually kept in segregated, designated accounts and are swept weekly to the taxing authority.

Some merchants bury that cost in the sales price, but generally speaking it’s a seperate line item that is treated differently. Merchants comingle those funds at their peril.

They are collecting a sales tax on behalf of the taxing government from the buyer and are then legally required to pass that money on. Of course, money is fungible so the revenue including sales tax goes into the big bucket and then money has to be taken out of that bucket to pay the tax. But in principle, they're just taking in money and passing it through.

It's a sales tax, not a 'buying' tax. Say, a company sells you a $100 item for $100, forgetting to include the tax in the final price. And say no one ended up paying tax for that transaction for in that tax year. Who is the government going to go after once they realize this to collect the $8.75 sales tax - you or the company?

Edit: I think you are confusing it with income tax. What you are saying happens for salaried income in USA.

Exactly this. It is a tax on a business based on their sales, and it is demanded whether or not the consumer pays it as a separate line item or not.

That said, it is a common misunderstanding, and it is made more so by companies that advertise "and we'll pay the sales tax!" They are always paying the sales tax, just most times they pass that cost along to the consumer.

They are always paying the sales tax, just most times they pass that cost along to the consumer.

While you are technically correct that this is how "sales tax" works, it's worth keeping in mind that in most states "sales tax" is mirrored by "use tax", and that these two "mutually exclusively" apply to the same purchases.

That is, if the seller is subject to the laws of a state they are generally required to obtain a "seller's permit" and to pay the sales tax, and are liable if this tax is not paid. But if a resident of that state purchases from someone who is not under that jurisdiction, the buyer then legally required to pay the same amount as a "use tax", and assumes the same liability. For California, see Question 1 here on "What is the difference between sales tax and use tax?": https://www.boe.ca.gov/sutax/faqtaxrate.htm#1

Which leads me to ask: for those of you in this thread saying "sales tax is not a buying tax", are you aware of the existence of this "use tax" and making a subtle semantic point that accidentally encourages illegal behavior, or are you unaware that of the interplay between the two? If previously unaware (and assuming you've ever purchased an item in a situation where sales tax was not charged), are you likely to change your behavior and self-report, or do plan to knowingly continue to engage in tax fraud?

(For the record, I do not self-report, although I do feel guilt about it.)

Yes, the first attempt by the states to get around the lack of interstate taxes, the imposition of a mirror tax on the party that was inside the state.

The presumption is that you, as (say) a local retailer, collected sales tax on what you sold because you have a legal requirement to do so. Doesn't matter if you split it out or not, you effectively collected sales tax one way or the other because state law says you had to. If, in your mind, you didn't collect any sales tax, too bad because you had to. You don't have the option to tell the customer "Hey, we're not going to collect sales tax. Please send it in yourself."

If you weren't required to collect sales tax, it is actually the customer who is on the hook to remit it. Of course, there's often no way to enforce this.

>Edit: I think you are confusing it with income tax. What you are saying happens for salaried income in USA.

Sort of but not really. Employers collect an estimated income tax liability based on your salary and what you've put on your W-4. The individual is still responsible for paying the right taxes and may be subject to penalties and having to make future quarterly tax payments if those withholdings are too low.

ADDED: The difference is the the government (in general) knows your taxable income and it's up to you to make the appropriate payments. In the case of sales tax/use tax, the government (thankfully) doesn't have the detailed and personal information to determine liability at the individual level so they have sellers do the up-front collection as much as possible.

No, it’s a sales and use tax. Merchants are required to maintain a license to collect and remit timely payments.

If you spend a significant amount of money on something like a car that requires registration or regularly buy other goods in high dollar quantities in Delaware or New Hampshire that you enjoy at home in Pennsylvania, New York, Massachusetts, the tax man will notice and eventually show up to collect.

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