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Re: Can someone explain how sales tax works in the US.

From: Lawrence
Subject: Re: Can someone explain how sales tax works in the US.
Date: Sun, 27 Oct 2002 19:44:30 -0700
User-agent: Mozilla/5.0 (X11; U; FreeBSD i386; en-US; rv:1.1) Gecko/20021022

A general sales tax solution in US is a very complicated thing. Best to have it configurable.

In the US there are 9 home rule states. California, Colorado are two, the others I can not remember. Home rule states can levy taxes by what every geographic area suits their ends -- usually by county. For example, if district (a tribe of individuals) decides they would like to build a library, they could mandate that merchants, telephone companies and whoever is in their defined geograhic area, pay a special "building library tax."
A good link to read more about US taxes is here :

Vertex at one time was the only "general" software available. They calcaulate taxes by a "geocode." Geocodes partition areas by zipcode. However zipcodes are highly standardized. So they Vertex hashes them to a Geocode; thus making it difficult for one to reverse engineer their software. Even though geocodes and zipcodes are not an exact mapping of tax rates to a tribes defined taxing area, tribe elders are happy when you send them tax money. For they themselves cannot figure out how to verify that taxes are being collected accurately.

There are clever US individuals who have discovered that taxes are based on zipcodes and have moved their postoffice boxes to a lesser taxed area. These noncomforming individuals are probematic.

This information may be quite dated as I have not looked into this for a while.

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