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At 7.25%, California has the highest minimum statewide sales tax rate in the United States, [8] which can total up to 10.75% with local sales taxes included. [9]Sales and use taxes in California (state and local) are collected by the California Department of Tax and Fee Administration, whereas income and franchise taxes are collected by the Franchise Tax Board.
The resale exemption is the most common use based exemption. Other use based exemptions could be items or services to be used in manufacturing, research & development, or teleproduction. Entity based exemptions are when the item or service is exempt solely because the purchaser falls into a category the state has granted an exempt status.
A luxury tax may be modeled after a sales tax or VAT, charged as a percentage on all items of particular classes, except that it mainly directly affects the wealthy because the wealthy are the most likely to buy luxuries such as expensive cars, jewelry, etc.
The Sixth VAT Directive requires certain goods and services to be exempt from VAT (for example, postal services, medical care, lending, insurance, betting), and certain other goods and services to be exempt from VAT but subject to the ability of an EU member state to opt to charge VAT on those supplies (such as land and certain financial services).
For example, sales tax in Chicago (Cook County), IL is 10.25%, consisting of 6.25% state, 1.25% city, 1.75% county and 1% regional transportation authority. Chicago also has the Metropolitan Pier and Exposition Authority tax on food and beverage of 1% (which means eating out is taxed at 11.25%).
Map of the world showing national-level sales tax / VAT rates as of October 2019. A comparison of tax rates by countries is difficult and somewhat subjective, as tax laws in most countries are extremely complex and the tax burden falls differently on different groups in each country and sub-national unit.
Some countries provide a reduction in tax for tourist related services which can some times be passed on to tourists including lower level of sales tax and VAT for accommodation services, passenger transportation, restaurant and catering services with admission tickets for sporting events and some cultural services being entirely exempt. [15] [16]
Certain goods and services must be exempt from VAT (for example, postal services, medical care, lending, insurance, betting), and certain other items are exempt from VAT by default, but states may opt to charge VAT on them (such as land and certain financial services). Hungary charges the highest rate, 27%. Only Denmark has no reduced rate. [57]