For the complete documentation index, see llms.txt
For the complete documentation index, see llms.txt
Why don’t wholesalers charge sales tax to retailers in the United States?
Wholesalers don't charge sales tax to retailers because retailers aren't the end user of the product. In the U.S., what's commonly called "sales tax" is technically a sales and use tax, and that "use" element is what excludes wholesale transactions: the tax is meant to apply once, at the point where a product reaches its final consumer, not at every step along the supply chain.
This is different from a value-added tax (VAT) system, where tax is collected at each stage of a sale, from manufacturer to distributor to wholesaler to retailer to consumer.
Under the U.S. approach, that entire chain stays untaxed until the retailer sells the product to the actual end customer, who is the one who pays the sales tax.