Subsidies are a measure of how distorted the market is. If you exempt something from sales tax that would otherwise apply it’s a subsidy because it’s cheaper relative to the rest of the market.

For example, excluding the trucking industry from fuel taxes is a fossil fuel subsidy because fuel taxes are used to pay for roads. The net effect is an increase in the number of trucks vs rail as rail is forced to pay for it’s own infrastructure while trucking would not be. The same applies to EV’s vs ICE as EV’s avoid paying for roads.