What is a Sales Tax?
Sales taxes are imposed by state law, and most states also give cities, counties and other local governments the authority to impose additional sales taxes on top of the state tax. According to sales tax act, Sales taxes are paid by consumers—the people buying the taxed item—but it’s typically the responsibility of the merchant to collect the money and make sure it gets to the proper tax agency. The process for paying that money to the government usually includes reporting a business’s taxable sales. Each state has their own process; this table can help you get started finding out the process in your state.
Community Development
According to state tax compliance, State, county and local municipalities often use a portion of sales tax for community development purposes. Developments can include public buildings, roads and other infrastructure improvements. Community development may not be the most important use of sales tax. Municipalities often put major infrastructure items lower on the list to pay for other services. Community development items can be on the list in order of importance. Municipalities also can select community development projects by replacing or repairing the oldest items first.
Public Services
Public services typically include schools, parks, libraries and similar services. Municipalities often devote a major portion of sales tax to these services. Many individuals use these services in their daily lives and often expect them to be available when needed. Municipalities usually create budgets for each type of service to ensure the majority of apportioned sales tax revenue is not spent on one service.
