The revenue from the remaining one percent is allocated to counties on a per capita basis. The latter allocation method helps to offset inequities in the amount of revenue counties generate through sales tax due to disparities in retail sales and is more in the nature of state revenue sharing. To distribute the funds between county and its municipalities, county commissions choose one of two options. One method allocates the revenue per capita based on population of the county and municipalities. The other method allocates revenue in proportion to the property tax paid by each municipality and the county.
Sales taxes are regressive - that is, they disproportionately impact low income people.
While the government imposes the same rate on every taxpayer, the inequity lies in what is being taxed. Sales taxes apply to the purchase of retail goods, but not to most services purchased at retail. For instance, the sales tax does not apply to maid services, legal services, or even spa memberships. Because low income families purchase a much larger percentage of goods like food and clothing than services, the sales tax burdens them much more heavily. Conversely, families with a higher standard of living spend less of their income on goods and more on services.