The given sales tax rate that an individual pays is State dependent as well as subject to county, borough, city, or other special sales tax assessments that may be applied. In America, there are five States that do not have a statewide sales tax, which are Oregon, Montana, New Hampshire, Alaska, and Delaware, though Alaska, for example, does have some boroughs that separately charge a sales tax. When it comes to exemptions from sales tax, there are all sorts of exemptions for all sorts of things, with the biggest exemption being materials that are bought for resale, which aren't charge a sales tax, until such a time, as that the material has been made into its final product, as well as groceries in many States are either not taxed at all, or are taxed at a significantly reduced tax rate. In any event, unless you live in one of the States which has no sales tax, most people pay sales tax routinely, of which, the item that one would typically purchase that would have the greatest sales tax impact in aggregate, would be one's vehicle, in which, a purchase at the average new vehicle price of $33,560 would if one is also paying the average sales tax rate of around 7% would mean that the sales tax collected on the sale of that vehicle would be $2349, a not inconsiderable amount of money.
The foregoing, makes you wonder, why States don't charge a sales tax on each home purchase, although the simplest argument against such, is the fact that homes have yearly property taxes that an owner must pay each year which seems sufficient and perhaps fair. The thing is, though, a sales tax is a one-time tax, so those purchasing a house, could reasonably be expected to come up with the money to pay that one-time sales tax, especially as the most common mortgages are at thirty years in length. Also, keep in mind, that sales taxes in general, have special exemptions, and different rates depending upon certain items that are purchased, signifying that States in conjunction with their localities, could setup a sales tax so that it is progressive, or exempts the first $100,000 of the purchase price of the home, and so on and so forth.
While, no doubt, purchasers of homes as well as the realtor business would be up in arms in regards to a sales tax being assessed against home sales, the bottom line is that sales tax in every single State that has one, didn't originally exist in any of those States to begin with. In addition, the beauty of a sales tax for individual States is that the money is collected on behalf of that State, in addition to its localities, boroughs, cities, or counties, signifying that a sales tax so collected would be able to be re-distributed throughout the State. So too, the very people that can afford to purchase a home to begin with, or the exact same people that can afford to pay a sales tax on the purchase of a home, so the wherewithal would still be there, and, in fact, a good argument could be made, that the implementation of a sales tax, would reduce somewhat speculation on homes, and would in its impact, help to stabilize further the housing market pricing mechanism.
In point of fact, State governments are always at least thinking about sources of revenues, so that, rather than like Arizona, which strangely imposes a small monthly rental tax on renters, they should instead look to charge the buyers of the housing product, a sales tax, for they are the owners, and most material purchases in this country have a mandated sales tax imposed.