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Why are there no sales taxes for wholesalers?
Why are there no sales taxes for wholesalers?
Updated over a week ago

In the United States, sales tax is sometimes also referred to as sales and use tax. The exclusion for wholesalers is implied by the "and use" portion of the tax.

Wholesalers are not required to charge sales tax to retailers since retailers are not technically end-users. As retailers are not the end consumer, the wholesaler need not collect sales taxes on transactions when selling to a retailer.

The sales tax system within the United States is different from the value added tax (VAT) used by many other countries around the world. Unlike sales tax, VAT is generally charged every step of the way: from manufacturer selling to distributor, from distributor selling to wholesaler, from wholesaler selling to retailer, and from retailer selling to consumer.

Instead of this tax methodology, sales tax is instead a tax on the ultimate consumer of a product or item. Rather than taxing each transaction or step of an item, the United States taxes products at the end of their sales lifecycle.

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