What Are Sales Taxes?

While visiting a local furniture store, you spot a $500 desk that's just perfect for your home office. You whip out your checkbook, write a check for $500, and the desk is yours. Or is it? As you're probably already aware from your everyday shopping experiences, you can't always purchase an item priced at $500 by paying just $500. Rather, in most states you're likely to pay anywhere from $520 to $550, with the added amount representing state and local sales taxes.

But what exactly is a "sales" tax? And how, if at all, does your being a small business owner affect the way you deal with such taxes?