The incidence of a state sales tax levied on the purchase of retail goods is:

Question

Quizplus · Accepted Answer

The ultimate consumer of the goods is the one who pays the sales tax at the time of purchase, and therefore bears the burden of the tax. The seller only collects and remits the tax to the government. The manufacturer is not directly involved in the sales transaction and therefore does not bear the incidence of the tax. The government levies the tax but does not bear the incidence of it, as they collect revenue from the tax.

The Incidence of a State Sales Tax Levied on the Purchase