Short answers, pulled from the story.
A sales tax is a tax paid to a governing body on the sale of certain goods and services, usually collected by the seller from the consumer at the point of purchase. Conventional retail sales tax applies only to final sales to end-users; businesses that resell goods can present a resale certificate to avoid being charged. In the United States, 45 states impose a statewide sales tax, and 38 of those also allow local governments to add additional layers.
Five states currently have no general sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon.
A conventional sales tax is charged once at the final retail sale, while a value-added tax is applied at every stage of production and distribution but only on the value added at each stage. This structure prevents the cascading or pyramiding effect, where the same underlying value is taxed multiple times. Over 140 countries have adopted VAT systems, which now account for approximately 20 percent of worldwide tax revenue.
The United States government has never imposed a general federal sales tax, but it levied an excise on whiskey as early as 1791. The first broad state-level general sales taxes were enacted by Kentucky and Mississippi in 1930. Twenty-two more states followed later in the 1930s, and Vermont became the last adopting state in 1969.
Under a 1992 Supreme Court ruling in Quill Corp. v. North Dakota, an online vendor without a physical presence in a state cannot be required to collect that state's sales tax. The Congressional Budget Office estimated uncollected use taxes on remote sales could reach $54.8 billion for 2011. The Streamlined Sales and Use Tax Agreement, finalized in 2010, established uniform standards, but its application to remote sellers ultimately requires an act of Congress.
Yes, economists generally classify sales taxes as regressive because the rate does not vary with a person's income or wealth, meaning it takes a larger percentage from lower-income households. One commonly proposed mitigation is to exempt necessities such as food, clothing, and medicines from the taxable base.