The United States of America is one of those countries that gives its states the liberty to make a choice regarding how they would manage their finances for sustaining and coping up with the demands of its residents. Usually, three taxes have obtained that help to make survival possible but some states have decided that they do not require sales tax making it extremely easy for shoppers. Here are a few states that do not impose any sales tax on its people.
Alaska does not take sales tax or income tax from its people. The only form of tax they demand is the property tax that together becomes the source of support in order to come to par with the demands and needs of residents. Many big companies such as ExxonMobil, ConocoPhillips etc. are operating in Alaska that pays royalties that cause the city to flourish. Even the tax reductions by these companies did not stop Alaska from caring about its resident where the government pays a designated amount to its citizens on an average basis.
In lieu of a sales tax, the state of Delaware has gross receipts of particular businesses. It makes extensive use of excise taxes that are charged as a flat rate per gallon on goods like alcohol and motor fuel. However, there is a $1.60 tax on cigarettes per pack. The upside is that the state has comparatively higher corporate income taxes and imposes additional taxation on specific distributors of services and good, which allows it to have a 0% property tax and sales tax. This makes the state very attractive for art dealers and collectors that want to escape the sales tax bills on paintings and other related pieces.
Montana has a similar function like Alaska but the taxes it obtains from such options are not merely enough to manage the city. Many areas of the city having large populations are usually free from sales tax but this does not really benefit the residents as the income tax implanted is far too high.
Among the states that do not imply sales tax, Oregon is that state which is totally in harmony with its neighbor. Washington is just nearby and the two states are kind of a lookalike of one another in terms of taxation. The mechanism for Washington is that they have high sales tax but they do not have any income tax whereas Oregon enforces no sales tax but their income tax is fairly high.
In New Hampshire, there is a sales tax of 9% on prepared meals in restaurants, short-term room rentals, and car rentals. Then there is a 7% tax on phone services and a 1.5% tax on real estate sales. Excise taxes are imposed on sales of gasoline, beer, electricity, and tobacco. Moreover, local governments are not allowed to declare sales taxes in light of the statewide 0% sales tax. Taxes on these goods are not due on B2B transactions when the buyer intends to resell the product. Then there is a timber tax as well that is imposed at the time of cutting at 10% of the value of the wood, which excludes the cut for personal use.
So what is better?
Many analysts believe that sales tax is the most brutal form of taxation that can be imposed on the residents. This is considered brutal as it clearly targets the lower or poor class of the society. Considering this these states are the most focused in terms of their strategy. This also encourages the shopper to purchase more increasing economic opportunity. A balance should be created considering the benefit of residents and government that will eventually help to sustain the city in a healthier manner.