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About indirect taxes

Indirect taxes are a type of tax collected by one entity (usually a producer or retailer) and paid to a government authority. These taxes are typically added to the purchase price of goods and services, and the obligation to pay the tax is passed to the consumer.

Common indirect taxes

Indirect taxes vary by jurisdiction.
  • Sales tax
     - Generally levied by US states, counties, cities, and municipalities. Sales tax is imposed by the taxing authority at the point of sale on goods and services. It's collected by the retailer and passed on to the state. Sales tax is based on a percentage of the selling prices of goods and services.
  • Use tax
     - Imposed on transactions that would've been subject to sales tax if both the buyer and seller were located in the same state. It's usually imposed on the use, storage, or consumption of tangible personal property in the state. Use tax is based on a percentage of the selling prices of goods and services.
  • Value Added Tax (VAT)
     - A form of consumption tax added to the sale price of a product. It's a tax on the value added to the product throughout the production process.
  • Goods and Services Tax (GST)
     - Generally charged on the consumption of goods and services at every stage of the supply chain. The ultimate tax burden is borne by the end consumer. Some countries, like Canada, have several different types of GST-like taxes, such as Provincial Sales Tax (PST), GST, and Harmonized Sales Tax (HST).

This article applies to:

  • Product: ONESOURCE Determination,ONESOURCE Indirect Tax

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