Sales & Use Tax Foundations (Part 7) – Amounts and Rates

Sales Tax Foundation Series

Part VII: Basic Questions and Answers about State Sales and Use Tax: Amounts and Rates

In our last blog, Part VI: Basic Questions and Answers about State Sales and Use Tax: Exemptions and Exclusions, we focused on the sixth of our foundational sales and use tax topics — exemptions and exclusions from sales tax, aimed primarily at the nontax specialist, who is often challenged by the complexities of sales and use taxation. In this blog, we ask and answer a few basic questions about the topics — what amounts are subject to tax and what rates are applied?

Question 1: What amounts are subject to sales tax?

States vary as to what is to be included in the sales price of either tangible personal property or services.  Each state addresses differently items such as discounts, rebates, service charges, gratuities, transportation, shipping and handling, trade-ins, and interest. A typical statute might define a concept like “gross receipts” as the item upon which the sales tax is imposed, and “sales price,” upon which the use tax is imposed, would be similarly defined as the total amount for which tangible personal property is sold, leased, or rented, valued in money (whether paid in money or otherwise). And then the statute of each state would further address any reductions in the amount by providing that the amount would or would not be reduced for (a) the cost of the property sold; (b) the cost of materials used, labor or service costs, interest paid (“interest charged” for use tax purposes), losses, or any other expenses; or (c) the cost of transporting the property, except as otherwise provided.

Question 2: What is the range of general sales and use tax rates imposed by different states?

The state and local sales tax rates vary from state to state. Overall, the state rates range from 2.9% to 7.5% but when local rates are added, the overall state-local rates can be much higher. Both state and local rates must be carefully tracked and researched on an ongoing basis.

Sales and Use: Amounts Subject to Sales and Sales Tax Rates — State-Specific Rules

Chart 1:  Amounts Subject to Sales Tax

STATE TAX BASE RULE
Alabama Gross proceeds of sales” and “gross receipts” are both defined as the value proceeding from the sale of tangible personal property without deduction for the cost of the property sold, the cost of materials used, labor or service cost, interest paid, or any consumer excise taxes that may be included within the sales price of the property sold. ( Ala Code Sec. 40-23-1(a)(6) ; Ala Code Sec. 40-23-1(a)(8) ) “Sales price” is the total amount for which tangible personal property is sold, including any services such as transportation that are a part of the sale without any deduction for the cost of the property sold. ( Ala Code Sec. 40-23-60(10) )
Arizona Excluded from gross income, gross receipts, or gross proceeds are: (1) state or local transaction privilege tax; (2) sales or transaction privilege tax imposed in Arizona by an Indian tribe, if the Indian tribal tax is imposed with respect to sales by non-Indian or nonaffiliated Indian vendors to nonmembers of the tribe; and (3) freight costs billed to and collected from a purchaser by a retailer for tangible personal property that, upon the order of the retailer, is shipped directly from a manufacturer or wholesaler to the purchaser.( Sec. 42-5002, A.R.S. )
Arkansas For sales and use tax purposes, “gross receipts,” “gross proceeds,” “sales price,” or “purchase price” means the total amount of consideration, including cash, credit, property, and services, for which tangible personal property or services are sold, leased, or rented, valued in money, without any deduction for: (1) the seller’s cost of the property sold; (2) the cost of materials used, labor or service cost, interest, any loss, any cost of transportation to the seller, any tax imposed on the seller, and any other expense of the seller; (3) any charge by the seller for any service necessary to complete the sale, other than a delivery charge or an installation charge; (4) delivery charge; (5) installation charge; or (6) credit for any trade-in. ( Sec. 26-52-103(13), A.C.A.; Sec. 26-53-102(1), A.C.A.; Reg. GR-3; Reg. UT-3)
California “Gross receipts,” upon which the sales tax is imposed, and “sales price,” upon which the use tax is imposed, are similarly defined as the total amount for which tangible personal property is sold, leased, or rented, valued in money (whether paid in money or otherwise), without any deduction for (a) the cost of the property sold; (b) the cost of materials used, labor or service costs, interest paid ( “interest charged” for use tax purposes), losses, or any other expenses; or (c) the cost of transporting the property, except as otherwise provided (see ¶61-150 Delivery Charges and Packing Costs). ( Sec. 6011, Rev. & Tax. Code Sec. 6012, Rev. & Tax. Code )
Colorado The tax base for the sales tax is the purchase price paid or charged on the sale and purchase of tangible personal property at retail. ( Sec. 39-26-104, C.R.S. ) The tax base for the use tax is the storage or acquisition charges or costs of storing, using, or consuming tangible personal property in Colorado purchased at retail. ( Sec. 39-26-202, C.R.S. )
Connecticut In determining “gross receipts” or “sales price” for transactions involving the transfer of tangible personal property, no deduction is allowed for the following:(1) the cost of the property sold, except in the circumstance described below;(2) the cost of the materials used, labor or service cost, interest paid, losses, or any other expense;(3) any charges by the seller to the purchaser for shipping or delivery, whether or not such charges are separately stated in a written contract or on a bill or invoice rendered to the purchaser and whether the shipping or delivery is provided by a seller or a third party. Formerly, only the cost of transportation of the property prior to its purchase was included in the “sales price” or “gross receipts.” ( Sec. 12-407(a)(8) and (9), G.S.)
DC In computing gross receipts, “sales price” means the total amount paid by a purchaser to a vendor as consideration for a retail sale, valued in money, whether paid in money or otherwise. ( Sec. 47-2001(p)(1) ; 47-2201(j), D.C. Code ) Deductions are not allowed for the following:(1) cost of property sold;(2) cost of materials used, labor or service cost, interest charged, losses, or any other expenses;(3) cost of transportation of the property before its sale at retail. Total sales price includes any services that are part of the sale and any amount for which credit is given to the purchaser by the vendor;(4) amounts charged for cover, minimum, entertainment, or other service in hotels, restaurants, cafes, bars, and other establishments where meals, food, drink, or other like tangible personal property is furnished for a consideration.( Sec. 47-2001(p)(1) ; Sec. 47-2201(j), D.C. Code )
Florida “Sales price” means the total amount paid for the property, including any services (valued in money) that are a part of the sale. It also may include any amount for which credit is given to the purchaser by the seller, but not the cost of the property sold, the cost of the materials used, labor or service costs, interest charged, losses or any other expenses. ( Sec. 212.02(16), F.S. ). “Cost price” means the actual cost of articles of tangible personal property, without any deduction for expenses such as materials, labor, services, or transportation charges. ( Sec. 212.02(4), F.S. ; Rule 12A-1.043(1)(a) )
Georgia “Sales price” replaced the previous term “gross sales” in the sales and use tax definition statute O.C.G.A. Sec. 48-8-2 . “Sales price” applies to the measure subject to sales tax and, effective April 27, 2011, is defined as the total amount of consideration (including cash, credit, property, and services) valued in money for which personal property or services are sold, leased, or rented, whether received in money or otherwise without any deduction for (1) the seller’s cost of the property; (2) the cost of materials used, labor, or service cost, interest, losses, all costs of transportation to the seller, all taxes imposed on the seller, and any other of the seller’s expenses; (3) charges imposed by the seller for any services necessary to complete the sale; or (4) delivery charges. ( O.C.G.A. Sec. 48-8-2 ) Prior to April 27, 2011, also included in the above list of items not deducted from the “sales price” were installation charges and trade-ins other than motor vehicle trade-ins.
Hawaii General excise tax is based upon values of products, gross proceeds of sales, or gross income. ( Haw Rev Stat Sec. 237-13 ) . “Gross income” means the gross receipts (cash or accrued) received for personal services or derived from trade, business, commerce, or sales. “Gross income” includes the value proceeding or accruing from the sale of tangible personal property or services and all actual or accrued receipts from the investment of a business’s capital, including interest, discount, rentals, royalties, fees, or other emoluments (without deductions for cost of property sold, cost of materials used, labor cost, taxes, royalties, interest, discount paid, or any other expense). ( Haw Rev Stat Sec. 237-3(a) )
Idaho Amounts included in sales price.—The term “sales price” and “purchase price” may be used interchangeably. “Sales price” means the total amount for which property, including services rendered as a part of the sale, is sold, rented, or leased, valued in money, whether paid in money or otherwise, without any deduction for (1) the cost of property sold, (2) the cost of materials used, labor or service cost, losses, or any other expense, (3) cost of transportation of the property prior to its sale, and (4) the face value of manufacturer’s discount coupons. ( IC Sec. 63-3613(a)(1)—(4); Rule 35.01.02.043)
Indiana “Gross retail income” is defined as the total gross receipts, of any kind or character, received in a retail transaction, including cash, credit, property, and services, for which tangible personal property is sold, leased, or rented, valued in money, whether received in money or otherwise, without any deduction for: (1) the seller’s cost of the property sold; (2) the cost of materials use, labor or service cost, interest, losses, all costs of transportation to the seller, all taxes imposed on the seller, and any of the seller’s other expenses; (3) charges by the seller for any services necessary to complete the sale, other than delivery and installation charges; or (4) delivery charges. ( IC 6-2.5-1-5 )
Illinois “Selling price” or the “amount of sale” is defined as the consideration for a sale valued in money, including cash, credits, property, and services. The selling price is determined without deduction for the cost of the property sold, the cost of materials used, the labor or service cost, the freight or transportation costs, salesmen’s commissions, interest paid by the seller, or any other expenses. However, the selling price does not include value given for traded-in property of “like kind and character.” ( 35 ILCS 120/1 ; 86 Ill. Adm. Code 130.425 ; 86 Ill. Adm. Code 130.410 )
Kansas Retailers’ sales tax is imposed on the gross receipts from the sale of tangible personal property and taxable services. ( Sec. 79-3603, K.S.A. ) “Gross receipts” means the total “selling price” or the amount received in money, credits, property, or other consideration valued in money from sales at retail in Kansas. ( Sec. 79-3602(o), K.S.A. ) The terms “gross receipts” and “sales or selling price” are fully defined below under “Streamlined Sales and Use Tax Agreement conforming provisions.”  Any discounts allowed and credited by a retailer are excluded from the selling price. ( Reg. 92-19-46(b) ; see also ¶61-130 Coupons, Premiums, and Cash Discounts) However, all charges for transportation, freight, handling, drayage, or similar charges must be included in the selling price, regardless of how any contract, invoice, or other evidence of the transaction is stated or computed, and regardless of whether the charges are separately billed or segregated on the same bill. ( Reg. 92-19-46(b) ; see also ¶61-150 Delivery Charges and Packing Costs, and ¶60-740 Transportation)
Kentucky The terms “gross receipts” and “sales price” mean the total amount of consideration for which tangible personal property, services or digital property are sold, leased, or rented, valued in money regardless of whether money is received, without any deduction for any of the following:  (1)the retailer’s cost of the property sold; (2) costs of materials, labor, or services imposed on the retailer;(3) interest on retailer; (4) retailer’s losses;(4) retailer’s transportation costs and expenses;(5) delivery charges imposed by the retailer (including charges for transportation, shipping, postage, handling, crating, and packing);(6)taxes imposed on the retailer;(7)charges by the retailer for services necessary to complete the sale; or (8) amounts for which credit is given by the retailer, other than credit for tangible personal property or digital property traded when the property traded is of like kind and character to the property purchased and the property traded is held by the retailer for resale.( KRS Sec. 139.010 )
Louisiana In general, the following items are excluded from the tax base: (1) cash discounts, (2) trade-ins, (3) separately stated installation charges, (4) finance and service charges, and (5) returned goods. Generally included in the tax base are these items: (a) uncollectible amounts (bad debts), (b) cash rebates, (c) discount coupons, and (d) excise taxes. The tax base itself differs depending upon whether the tax imposed is that on sales, on use, or on rental activities. “Gross sales” is the basis for sales tax, whereas “cost price” is used for use tax and “gross proceeds” is used for rental transactions. These terms are defined below. ( Sec. 47:302, La R.S. )
Maine “Sale price” is defined as the total amount of a retail sale valued in money, whether received in money or otherwise. “Sale price” does not include: (1) discounts allowed and taken on sales; (2) allowances in cash or by credit made upon the return of merchandise pursuant to warranty; (3) the price of property returned by customers when the full price is refunded either in cash or by credit; (4) the price received for labor or services used in installing, applying, or repairing the property sold, if separately charged or stated; (5) any amount charged or collected, in lieu of a gratuity or tip, as a specifically stated service charge, when that amount is to be disbursed by a hotel, motel, restaurant, or other eating establishment to its employees as wages; (6) the amount of any federal tax imposed with respect to retail sales, whether imposed upon the retailer or consumer, except any manufacturers’, importers’, alcohol, or tobacco excise tax; (7) transportation charges for shipments made directly to the purchaser, provided the charges are separately stated and the transportation occurs by common or contract carrier or U.S. mail. (36 M.R.S.A. Sec. 1752(B) )
Maryland “Taxable price” means the value in money of the consideration that is paid, delivered, payable, or deliverable by a buyer to a vendor in the consummation and complete performance of a sale, without deduction for any expense or cost, including the cost of any labor or service rendered, any material used, or any property sold. The consideration may take the form of money, rights, property, promises, or anything else of value, or by exchange or barter. Some charges may be excluded from the taxable price if separately stated, e.g., charges for delivery, freight, or other transportation service for delivery directly to the buyer by the vendor or by another person acting for the vendor, unless the transportation service is a taxable service; interest, finance, or similar charges for extension of credit to the buyer, and installation or application charges.  However, if these charges are included in a lump-sum price with no separate statement, the tax must be collected on the entire amount of the sale.( Sec. 11-101, Tax General Art. ; Reg. 03.06.01.08 )
Massachusetts “Gross receipts” means the total sales price received by vendors as a consideration for retail sales. The “sales price” is the total amount paid by a purchaser to a vendor as consideration for a retail sale, valued in money or otherwise. In determining the sales price, no deduction is allowed for: (1) the cost of property sold;(2) the cost of materials used, labor or service costs, interest charges, losses, or other expenses; (3) transportation costs incurred prior to the sale of the property;(4) any amount paid for any services that are a part of the sale; and (5) any amount for which credit is given to the purchaser by the vendor must be included in the sales price.  ( Sec. 1, Ch. 64H, G.L. )
Michigan Sales price. — means the total amount of consideration, including cash, credit, property, and services, for which tangible personal property or services are sold, leased, or rented, valued in money, whether received in money or otherwise, and applies to the measure subject to sales tax. “Sales price” includes the following: (1) seller’s cost of the property sold;(2) cost of materials used, labor or service cost, interest, losses, costs of transportation to the seller, taxes imposed on the seller other than sales tax, and any other expense of the seller;(3) charges by the seller for any services necessary to complete the sale, other than (i) an amount received or billed by the taxpayer for remittance to the employee as a gratuity or tip, if the gratuity or tip is separately itemized and (ii) labor or service charges involved in maintenance and repair work on tangible personal property of others if separately itemized;(4) delivery charges incurred or to be incurred before the completion of the transfer of ownership;(5) installation charges incurred or to be incurred before the completion of the transfer of ownership; and (6) credit for any trade-in (except for the trade-in value of watercraft and the limited trade-in value of motor vehicles).( Sec. 205.51(1)(d), M.C.L. ; Sec. 205.92, M.C.L. )
Minnesota “Sales price” is the measure subject to sales tax, and means the total amount of consideration, including cash, credit, property, and services, for which personal property is sold, leased, or rented, valued in money or otherwise, without deduction for (1) the seller’s cost of the property sold;(2) the cost of materials used, labor or service cost, interest, losses, all costs of transportation to the seller, all taxes imposed on the seller, and any other expenses of the seller; (3) charges by the seller for any services necessary to complete the sale, other than delivery and installation charges;(4) delivery charges, except the percentage of the delivery charge allocated to delivery of exempt property, when the delivery charge is allocated by using either (a) a percentage based on the total sales price of the taxable property compared to the total sales price of all property in the shipment, or (b) a percentage based on the total weight of the taxable property compared to the total weight of all property in the shipment; or (5) installation charges.( Sec. 297A.61(7), Minn Stats )
Mississippi The following components comprise the Mississippi sales tax base: (1) bad debt deduction—allowed as credit;(2) coupons, premiums, and cash discounts—cash discounts and retailers’ discounts not included, manufacturers’ coupons included;(3) installation charges—included in basis;(4) federal, state, local excise taxes—federal retailers excise tax, tax on income from transportation, telegraphic dispatches, telephone conversations, electric energy, and certain state gasoline tax not included in basis;(5) installment, lay-away, conditional sales—payments reported at time of sale;(6)finance charges—included unless credit extended by third-party creditor; and(7) returned goods, repossessions—returns not included in tax base, repossessions included in tax base.
Missouri “Sales price” is the money value of consideration paid or given by a purchaser to a vendor for tangible personal property including any services that are part of the sale, any amount for which credit is given, without deduction for the cost of property sold, cost of materials, labor or service cost, losses, or any other expenses. ( Sec. 144.605(8), RSMo ) “Sales price” does not include: (1) usual and customary delivery charges that are separately stated,(2) cash discounts,(3) amounts charged for property returned by customers,(4) amounts charged for labor or services rendered in installing sold property, and (5) charges incident to the extension of credit.( Sec. 144.605(8), RSMo )
Nebraska Sales price. —The total amount for which property is sold valued in money whether paid in money or otherwise, without any deduction for: (1) the cost of the property sold; (2) the cost of materials, labor or service costs, interest paid, losses, transportation costs, taxes imposed on the seller, or any other expense;(3) charges by the seller for any services necessary to complete the sale;(4) delivery charges; and (5) installation charges.
Nevada “Gross receipts,” the basis for the sales tax, means the total amount of the sale, lease, or rental price of the retail sales of retailers, whether received in money or otherwise, without any deduction of the following: (1) the cost of the property sold under certain situations (2) the cost of the materials used, labor or service rendered, interest paid, losses or any other expense; or (3) The cost of transportation of the property prior to its sale to the buyer. (NRS Sec. 372.025 ; NRS Sec. 374.030 )
New Jersey The definition of “sales price” is the measure subject to sales tax and means the total amount of consideration, including cash, credit, property, and services, for which personal property or services are sold, leased, or rented, valued in money, whether received in money or otherwise, without any deduction for the following: (1) the seller’s cost of the property sold; (2) the cost of materials used, labor or service cost, interest, losses, all costs of transportation to the seller, all taxes imposed on the seller, and any other expense of the seller; (3) charges by the seller for any services necessary to complete the sale; and(4) delivery charges.( N.J.S.A., Sec. 54:32B-2(oo) )
New Mexico In computing the gross receipts tax due, a taxpayer is allowed deductions from gross receipts. ( NM Stat Ann Sec. 7-9-45 ) But only those receipts specified by statute may be deducted, and they may be deducted from gross receipts only once, even if they are deductible under more than one section in the statutes. Examples of this are given in the regulations. ( 3.2.202.8 NMAC )
New York In general, the New York State sales and use taxes are imposed on receipts from every retail sale of taxable tangible personal property and specified services. ( Sec. 1105, Tax Law ; Sec. 1110, Tax Law ). The term “receipt” is defined as the amount of the sales price of any item of property or the charge for any service subject to the sales or use tax, including gas and gas service and electricity and electric service of whatever nature, valued in money (whether received in money or otherwise). ( Sec. 1101(b)(3), Tax Law ; Reg. Sec. 526.5(a) ) Included in the taxable receipts are any amounts for which credit is allowed by the vendor to the purchaser, without any deduction for expenses or early payment discounts and any charges by the vendor to the purchaser for shipping or delivery or—with respect to gas, gas service, electricity, and electric service—for transportation, transmission, or distribution (regardless of whether such charges are separately stated in the written contract or on the bill rendered to the purchaser and regardless of whether such shipping or delivery—or such transportation, transmission, or distribution—is provided by the vendor or by a third party). The sales and use taxes on delivery charges are imposed upon tangible personal property actually delivered and services actually rendered after August 31, 1991, although delivered or rendered under a prior contract. The taxable receipts do not include any credit for tangible personal property accepted in part payment and intended for resale.
North Carolina “Sales price” is defined as the total amount of consideration, including cash, credit, property, and services, valued in money, whether received in money or otherwise, without any deduction for the following: (1) the seller’s cost of the property sold; (2) the cost of materials used, labor or service cost, interest, losses, all costs of transportation to the seller, all taxes imposed on the seller, and any other expense of the seller; (3) charges by the seller for any services necessary to complete the sale;(4) delivery charges; (5) installation charges; (6) the value of exempt personal property given to the purchaser where taxable and exempt personal property have been bundled together and sold by the seller as a single product or piece of merchandise; and (7) credit for trade-in.  ( Sec. 105-164.3(37), G.S.)
Ohio Price.— is the total amount of consideration, including cash, credit, property, and services, for which tangible personal property or services are sold, leased, or rented, valued in money, whether received in money or otherwise, without any deduction for the following: (1) the vendor’s cost of the property sold;(2) the cost of materials used, labor or service costs, interest, losses, all costs of transportation to the vendor, all taxes imposed on the vendor, and any other expense of the vendor;(3) charges by the vendor for any services necessary to complete the sale;(4) installation charges;(5) credit for any trade-in; and(6) delivery charges.( Sec. 5739.01(H)(1), Ohio R.C. )
Oklahoma “Gross proceeds”, “gross receipts,” or “sales price” means the total amount of consideration, including cash, credit, property, and services, for which personal property or services are sold, leased or rented, valued in money, whether received in money or otherwise, without any deduction for the following: (1) the seller’s cost of the property sold;(2) the cost of materials used, labor, or service cost;(3) interest, losses, all costs of transportation to the seller, all taxes imposed on the seller, and any other expense of the seller;(4) charges by the seller for any services necessary to complete the sale, other than delivery and installation charges;(5) delivery charges and installation charges, unless separately stated on the invoice, billing, or similar document given to the purchaser; and (6) credit for any trade-in. ( 68 O.S. Sec. 1352(12) ; Rule 710:65-1-2 ; Rule 710:65-1-9 )
Pennsylvania Sales and use tax is generally imposed on the purchase price. (Sec. 202(a), Act of March 4, 1971, P.L. 6, [72 P.S. §7202(a)] ; Reg. Sec. 31.2 ).  “Purchase price” is defined as the total value of anything paid, delivered, or promised to be paid and delivered in complete performance of a sale or purchase at retail, without any deduction on account of the cost or value of the property sold, cost or value of transportation, cost or value of labor or service, interest or discount paid or allowed after the sale is consummated, any other taxes imposed by the Commonwealth of Pennsylvania or any other expense except that there shall be excluded any gratuity or separately stated deposit charge for returnable containers.
Rhode Island “Sales price” is the measure subject to sales tax and means the total amount of consideration, including cash, credit, property, and services, for which personal property or services are sold, leased, or rented, valued in money, whether received in money or otherwise, without any deduction for the following: (1) the seller’s cost of the property sold; (2) the cost of materials used, labor or service cost, interest, losses, all costs of transportation to the seller, all taxes imposed on the seller, and any other expense of the seller; (3) charges by the seller for any services necessary to complete the sale, other than delivery and installation charge; (4) delivery charges; (5) credit for any trade-in, as determined by state law; or (6) the amount charged for services, as defined in Sec. 44-18-7.3. (RI Gen. Laws Sec. 44-18-12 )
South Carolina The tax base for the sales tax is the gross proceeds of sales; the tax base for the use tax is the sales price of the property, gross proceeds from certain services, or fair market value of property imported into the state. “Gross proceeds of sale” means the value proceeding or accruing from the sale, lease, or rental of tangible personal property and includes: (1) proceeds from consignment sales;(2) proceeds from the sale of tangible personal property (without deduction for the cost of the goods, materials, labor, service, or transportation, interest paid, losses, federal manufacturers or importers excise taxes, or any other expenses); and(3) the fair market value of property withdrawn from inventory except for certain exemptions.  ( Sec. 12-36-90(1), S.C. Code ; Sec. 12-36-130, S.C. Code )
South Dakota Gross receipts and purchase price.—The terms “gross receipts” and “purchase price” are defined as the total amount or consideration, including cash, credit, property, and services, for which tangible personal property or services are sold, leased, or rented, valued in money, whether received in money or otherwise, without any deduction for the following: (1)the retailer’s cost of the property or service sold; (2) the cost of materials used, labor or service cost, interest, losses, all costs of transportation to the retailer, all taxes imposed on the retailer, and any other expense of the retailer;(3) with certain exceptions, charges by the retailer for any services necessary to complete the sale whether or not separately stated, including delivery charges; and (4) the value of exempt tangible personal property whether or not separately stated on the invoice, billing, or similar document given to the purchaser where taxable and exempt tangible personal property have been bundled together and sold by the retailer as a single product or piece of merchandise.( Sec. 10-45-1(6), SDCL ; Sec. 10-46-1(10), SDCL )
Tennessee “Sales price” applies to the measure subject to sales tax and means the total amount of consideration, including cash, credit, property, and services, for which personal property or services are sold, leased, or rented, valued in money, whether received in money or otherwise, without any deduction for the following: (1) the seller’s cost of the property sold; (2) the cost of materials used, labor or service cost, interest, losses, all costs of transportation to the seller, all taxes imposed on the seller, and any other expense of the seller; (3) charges by the seller for any services necessary to complete the sale, other than delivery and installation charges; (4) delivery charges; (5) installation charges; and (6) the value of exempt personal property given to the purchaser if taxable and exempt property have been bundled together and sold by the seller as a single product or piece of merchandise.( Sec. 67-6-102, T.C.A. )
Texas “Sales price” or “receipts” is the total amount for which a taxable item is sold, leased, or rented, valued in money, without a deduction for the cost of any of the following:(1) the taxable item sold, leased, or rented;(2) the materials used, labor or service employed, interest, losses, or other expenses;(3) the transportation or installation of tangible personal property, or(4) transportation incident to a taxable service.( Sec. 151.007, Tax Code )
Utah Purchase price and sales price. —The terms “purchase price” and “sales price” mean the total amount of consideration valued in money for which tangible personal property, a product transferred electronically, or services are sold, leased, or rented. The terms include items such as;(1) the seller’s cost of the tangible personal property, a product transferred electronically, or services sold;(2) the seller’s expenses, including the cost of materials used, a labor cost, a service cost, interest, a loss, the cost of transportation to the seller, or a tax imposed on the seller; or(3) a charge by the seller for any service necessary to complete the sale.( Sec. 59-12-102, Utah Code Ann. )
Vermont The sales price is the total amount of consideration, including cash, credit, property, and services, for which personal property or services are sold, leased, or rented, valued in money, whether received in money or otherwise, without deduction for the following: (1) the seller’s cost of the property sold; (2) the cost of materials used, labor or service cost, interest, losses, all costs of transportation to the seller, all taxes imposed on the seller, and any other expenses of the seller; (3) charges by the seller for any services necessary to complete the sale, other than installation charges; or (4) delivery charges.( Sec. 9701(4), Tit. 32, V.S.A. ; Reg. 1.9701(4)-1 )
Virginia The term “sales price” does not include the following: (1) any cash discount allowed and taken; (2) finance charges, carrying charges, service charges, or interest from credit extended on sales of tangible personal property under conditional sale contracts or other conditional contracts providing for deferred payment of the purchase price. When used articles are taken in trade, or in a series of trades as a credit or part payment on the sale of new or used articles, the sales tax is levied on the net difference between the sales price of the new or used articles and the credit for the used articles; (3) separately stated local property taxes collected; (4) that portion of the amount paid by the purchaser as a discretionary gratuity added to the price of a meal; or (5) that portion of the amount paid by the purchaser as a mandatory gratuity or service charge added by a restaurant to the price of a meal, but only to the extent that the mandatory gratuity or service charge does not exceed 20% of the price of the meal.  The sales price also excludes installation charges and separately stated transportation charges. (Sec. 58.1-602, Code).
Washington The “selling price” (or the “sales price”) is the total amount of consideration, except trade-in property of like kind, including cash, credit, property, or services, for which tangible personal property, extended warranties, digital goods, digital codes, digital automated services, or services defined as a “retail sale” are sold, leased, or rented, valued in money, whether received in money or otherwise. No deduction is allowed for:(1) the seller’s cost of the property sold;(2) the cost of materials used, labor or service costs, interest, losses, all costs of transportation to the seller, all taxes imposed on the seller, and any other expense of the seller;(3) charges by the seller for any services necessary to complete the sale, other than delivery or installation charges;(4) delivery charges; and(5) installation charges.( RCW 82.08.010 )
West Virginia “Purchase price” is the measure of use tax, and has the same meaning as “sales price,”.  “Sales price” is the measure subject to consumers’ sales and service tax and includes the total amount of consideration, including cash, credit, property and services, for which personal property or services are sold, leased or rented, valued in money, whether received in money or otherwise, without any deduction for the following: (1) the seller’s cost of the property sold; (3) the cost of materials used, labor or service cost, interest, losses, all costs of transportation to the seller, all taxes imposed on the seller, and any other expense of the seller; (4) charges by the seller for any services necessary to complete the sale, other than delivery and installation charges; (5) delivery charges; and (6) installation charges. ( W.Va. Code Sec. 11-15B-2 )
Wisconsin “Sales price” means the total amount of consideration, including cash, credit, property, and services, for which tangible personal property, taxable items, or services are sold, licensed, leased, or rented, valued in money, whether received in money or otherwise, without any deduction for the following:(1) the seller’s cost of the property or taxable items sold;(2) the cost of materials used, labor or service costs, interest, losses, all costs of transportation to the seller, all taxes imposed on the seller, and any other expense of the seller;(3) charges by the seller for any services necessary to complete the sale, other than delivery and installation charges;(4) delivery charges, except separately stated delivery charges for direct mail; or (5)installation charges.( Sec. 77.51(15b)(a), Wis. Stats. ; Sec. 77.51(15b)(b)(4), Wis. Stats. )
Wyoming “Sales price” and “purchase price” mean the total amount or consideration, including cash, credit, property, and services, for which personal property or services are sold, leased or rented, valued in money, without any deduction for: (1) the seller’s cost of the property sold; (2) the cost of materials used, labor or service cost, interest, losses, all costs of transportation to the seller, and any other expense of the seller; (3) charges by the seller for any services necessary to complete the sale; (4) delivery charges; or (5) installation charges. ( Sec. 39-15-101(a)(viii), W.S.; Sec. 39-16-101(a)(iv) and (xii), W.S.)

 

Chart 2:  Rates of Tax

Rate listed below is the general state rate.
Jurisdiction 2018 General Rates Citation
Alabama 4% Ala. Code §40-23-26
Arizona 5.6% Ariz. Rev. Stat. §42-5010
Arkansas 6.5% Ark. Code. Ann. §26-52-302
California 7.25% Cal. Rev. & Tax Code §6051
Cal. Rev. & Tax Code §6051.2
Cal. Const. art. XIII, §35
Cal. Rev. & Tax Code §6051.3
Cal. Rev. & Tax Code §6051.5
Cal. Rev. & Tax Code §6201
Cal. Rev. & Tax Code §6051.7
Cal. Rev. & Tax Code §6201.7
Cal. Gov. Code §99040
Colorado 2.9% Colo. Rev. Stat. §39-26-105
Connecticut 6.35% Conn. Gen. Stat. §12-408
Conn. Gen. Stat. §12-411
District of Columbia 5.75% D.C. Code Ann. §47-2002
Florida 6% Fla. Stat. ch. 212.05
Georgia 4% Ga. Code. Ann. §48-8-30
Ga. Code. Ann. §48-8-3.1
Hawaii 4% Haw. Rev. Stat. §237-13
Idaho 6% Idaho Code §63-3619
Illinois 6.25% 35 ILCS 105/3-10
Kansas 6.5% Kan. Stat. Ann. §79-3603
Kan. Stat. Ann. §79-3703
Kentucky 6% Ky. Rev. Stat. Ann. §139.200
Ky. Rev. Stat. Ann. §139.310
Louisiana 5% La. Rev. Stat. Ann. §47:302
La. Rev. Stat. Ann. §47:331
La. Rev. Stat. Ann. §51:1286
La. Rev. Stat. Ann. §47:321
LA DOR Publication R-1002
Maine 5.5% Me. Rev. Stat.Ann. tit.36, §1811
Maryland 6% Md. Code Ann. §11-104(a)
Massachusetts 6.25% Mass. Gen. Laws ch. 64H, §2
Michigan 6% Mich. Comp. Laws §205.52(1)
Minnesota 6.875% Minn. Stat. §297A.62(1) and (1a)
Minn Const Art. XI, §15
Mississippi 7% Miss. Code. Ann. §27-65-17
Missouri 4.225% Mo. Rev. Stat. §144.020
Mo. Const. art. IV, §43(a)
Mo. Const. art. IV, §47(a)
Nebraska 5.5% Neb. Rev. Stat. §77-2701.02
Nevada 6.85% Nev. Rev. Stat. §372.105
Nev. Rev. Stat. §374.110
Nev. Rev. Stat. §377.040
New Jersey 6.625% N.J. Stat. Ann. §54:32B-3
New Mexico 5.125% N.M. Stat. Ann. §7-9-4
Oklahoma 4.5% Okla. Stat. tit. 68, §1354
Okla. Stat. tit. 68, §1402
Pennsylvania 6% 72 P.S. §7202
Rhode Island 7% R.I. Gen. Laws §44-18-18
South Carolina 6% S.C. Code Ann. §12-36-910
S.C. Code Ann. §12-36-1110
South Dakota 4% S.D. Codified Laws §10-45-2
Tennessee 7% Tenn. Code. Ann. §67-6-202
Vermont 6% Vt. Stat. Ann. tit. 32, §9771
Virginia 4.3% Va. Code. Ann. §58.1-603
West Virginia 6% W. Va. Code §11-15-3(b)
W. Va. Code §11-15A-2
Wisconsin 5% Wis. Stat. §77.52(1)
Wyoming 4% Wyo. Stat. Ann. §39-15-104
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AUTHOR

Jerome Nestor

Jerome Nestor, Esq., CPA, MBA-Accounting Information Systems Manager Tax & Accounting North America Wolters Kluwer Mobile: +1 847.312.5671 Email: jerry.nestor@wolterskluwer.com

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