Of course, how much you pay in state sales tax really depends on where you live. California, Indiana, New Jersey, Mississippi and Tennessee are at the head of the class when it comes to hammering citizens with high sales taxes according to the Sales Tax Clearinghouse. On the other side of the spectrum, if you live in Alaska, Montana or New Hampshire, you may not be able to golf year-round, but you can get a huge break on sales taxes.
In California, the combined state and county sales tax pushed the overall sales tax rate to approximately 9%. So if you buy a $1,000 sofa in the wrong county, the retailer will add another $90 or so on your total bill. If you are buying new furniture for your whole house, then we’re talking some real money.
Depending on where you live, you may not have to pay taxes on certain items (prescription drugs are usually untaxed in most states, for example). Some states may also exempt food and clothing, and possibly non-prescription drugs.
By and large, sales taxes come in two distinct categories:
Vendor taxes. States impose vendor taxes on retailers doing business in the state. In most cases, retailers absorb the tax, but pass along the costs to customers in the form of higher prices.
Consumer excise taxes. This isn’t exactly a shocker to most consumers, who pay taxes on a wide list of goods and services they purchase. Retailers and other sales agents collect the tax from customers, then pass it along to the state.
The onus is on you, the consumer, to try and avoid sales taxes, which means avoiding “unique” sales taxes you may not even know about. Here’s a list of some “under the radar” state sales taxes that you’ll have to pay if you purchase the following items or services: