Sales taxes are one of the vital income sources for state and local governments. Lawmakers have worked to find ways of making sales taxes more unbiased for funding public services. This policy has provided relief for low-income taxpayers with two choices: broad-based exemptions and targeted sales tax credits.
Broad-Based Exemptions - are the most popular approach to progressive sales tax relief. It eliminates all sales taxes on certain retail items.
Targeted Sales Tax Credits - are an innovative option or choice to exemptions. Usually administered through the income tax, these credits are usually refundable.
Sales Tax Relief: The Solution
Sales tax exemptions and credits are both best and advanced options for low-income tax relief. It should be part of a more comprehensive strategy for tax fairness, including a progressive, graduated personal income tax and tax audit defense.