Quote:
Originally Posted by Kumabjorn
Not being in the know, would you pay sales tax on the work a painter did on your house, or the repair work of a plumber? In Sweden we do, but if you don't in the US, that would imply that you only pay sales tax on actual physical goods. In that case wouldn't it be requied by law to define eBooks and Mp3 as physical goods?
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As mentioned below, we typically don't pay sales tax on services. If you get work done by a plumber, there will be no tax on the labor, but you will have to pay tax on any parts he provides. Same is true at a car repair shop.
Most states that charge sales taxes specify that it applies to tangible and intangible goods...but some states only apply it to tangible goods.
I think the most confusing area is groceries. Most states (I think) don't charge sales tax for groceries, but what counts as "groceries" varies widely, with ready-to-eat food typically being charged tax...although what ready-to-eat food is can be complicated, too. In my state, toilet paper is taxed, but I've been to states where it isn't.