Re:Sales tax creates more unnecessary pain than value added tax
by jcrawfordor on Friday December 11, 2020 @03:31PM
(#25390571)
In my state, items purchased for resale, items purchased to be used as consumable supplies in the manufacture of other items, construction materials, and several other cases are exempt from sales tax via a device called a non-taxable transaction certificate (NTTC). Obtaining NTTCs from the tax department is a slight hassle but it's done via a web system once per vendor and probably hasn't taken me more than a few minutes of my life, as a small-scale reseller. I've also never had an issue with a seller not accepting an NTTC, and in fact some places I obtain goods (certain surplus sales) actually require an NTTC as a condition of participating, since they have opted not to even be capable of collecting sales tax.
Having previously lived in a state with no sales tax whatsoever, I'm not really sure how common this scheme is across states, but given said national marketplaces that require an NTTC as a condition of entry I'm guessing exceptions where such an item doesn't exist are fairly rare (although other states do call them by other names, I have once or twice obtained a similar form from a neighboring state which required such a document for out-of-state purchasers).
So I guess I'm not sure that this author really understands the reality of sales tax in the US - if sales tax really was imposed on every step of the supply chain it would be a huge issue, but it seems that the general principal is that sales tax should only be imposed on sale to the final user.
Of course my state doesn't actually have a sales tax either but instead a gross receipts tax. While technically a tax on the business and not the transaction, the GRT is conventionally passed on to the customer just like a sales tax, so the two are fairly equivalent for typical transactions. Oddly some websites specifically mention New Mexico as a state in which the GRT is not charged to the customer, indicating that the author has never purchased anything in New Mexico...
Having previously lived in a state with no sales tax whatsoever, I'm not really sure how common this scheme is across states, but given said national marketplaces that require an NTTC as a condition of entry I'm guessing exceptions where such an item doesn't exist are fairly rare (although other states do call them by other names, I have once or twice obtained a similar form from a neighboring state which required such a document for out-of-state purchasers).
So I guess I'm not sure that this author really understands the reality of sales tax in the US - if sales tax really was imposed on every step of the supply chain it would be a huge issue, but it seems that the general principal is that sales tax should only be imposed on sale to the final user.
Of course my state doesn't actually have a sales tax either but instead a gross receipts tax. While technically a tax on the business and not the transaction, the GRT is conventionally passed on to the customer just like a sales tax, so the two are fairly equivalent for typical transactions. Oddly some websites specifically mention New Mexico as a state in which the GRT is not charged to the customer, indicating that the author has never purchased anything in New Mexico...