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> My understanding is that a state sales tax can't be less than about 3.5% because that is the cost of operating the sales tax collection bureaucracy. That sou
by Bromskloss 9y ago
> My understanding is that a state sales tax can't be less than about 3.5% because that is the cost of operating the sales tax collection bureaucracy.
That sounds staggeringly costly. Are there things within the administration that has to be done and actually are difficult to do with less money, or is it as record-breakingly inefficient as it sounds?
- lozenge 9y agoPerhaps they are including the cost to the businesses of marking up items, checking tax rates etc?
- Bromskloss 9y agoInteresting thought. A low tax rate should result in a small markup, though, and I wouldn't think the extra administration laid upon businesses by sales tax would offset a 3.5% sales tax, would you?
- anonymous5133 9y agoI work as a sales tax auditor and the original comment is flat out wrong if you think about it. I'm assuming he is talking about the department of revenue or similar agency responsible for enforcement of sales tax. If you think about a state that has a 7% sales tax rate, do you think that state is spending HALF of the sales tax revenue on the operating budget for the department of revenue?
- faster 9y agoI'd love to have some support for a real number. I found a source [1] for the cost to retailers to collect a tax (about 4.23% of tax collected in WA) but while most states make it pretty easy to see how much sales tax was collected they don't make it easy to see what it cost to collect that tax, separate from the other taxes they collect (income tax, corporate tax). If you have any insight into this, or suggestions that are less painful than "read the state budget detail", I'd love to have a cost number that is based on facts. [1] https://dor.wa.gov/content/retailers-cost-collecting-and-remitting-sales-tax-study https://dor.wa.gov/content/retailers-cost-collecting-and-rem...