Money & budgets
sales tax
A percentage tax on retail purchases, levied by states and many localities. There is no federal sales tax.
In full
Sales tax rates combine a state rate with local add-ons, so the rate can differ across a city line. Most states exempt some necessities, such as groceries or prescription drugs, to soften the tax's regressive effect. For many states and localities it is the single largest revenue source, which ties their budgets closely to consumer spending.
Where to go next
Keep going
Browse every term in the glossary, or see the vocabulary in motion in the How government works walkthroughs.
A plain-language explanation for civic education, not legal advice. When in doubt, the official source named above controls.