You've been waiting for months. The latest version of your favorite video game comes out today. You've mowed lawns, done extra chores, and saved up gifts from your grandparents. The new game costs $49.99. You have exactly $50.00 saved. So you're good to go, right? Unless you're lucky enough to live in a state without sales tax, you're going to have to wait for that new game.
Figuring Out the Tax
States use revenue from sales tax to fund programs such as schools and social services. Most states do not tax groceries, since food is considered a basic necessity; however, restaurant and fast food meals are usually taxed. Items like cigarettes and alcoholic beverages are taxed at higher-than-normal rates. States hope these higher taxes will keep people from smoking and drinking. Some states have no sales tax and use this fact to attract shoppers from other states.
Check out this musical animated short to learn more: http://www.youtube.com/watch?v=6Q3NPgHZzDo
With the links below, learn about statewide sales tax holidays, potential taxes on online shopping, and the uncertain future of Minnesota's lack of sales tax on clothing.