The Complete Guide for Immigrants and Americans Life in the USA is a complete guide to American life for immigrants and Americans. All rights reserved. Sales Taxes Sales taxes exist in most but not all states, and are much harder to avoid than income taxes.
Merchants are responsible for collecting sales tax on purchases and then giving it to the state.
Not all products are taxed. Often food and clothing is exempt, depending upon the state you're in. Many services, hotel rooms, gasoline and other items may be taxed. In the underground economy, sales tax is rarely collected. In many instances, especially dealing with street merchants, cash prices will be cheapest because neither sales nor income taxes will be paid.