Some or all of these taxes may be refunded but it generates a lot of paperwork (and income). The VAT paperwork can be burdensome but it remains a major source of tax income for most of the European Union, Mexico and other countries which charge on average a 15-25% VAT rate. Canadian sales taxes range from 5% in Alberta to an effective 16.6% in Prince Edward Island where sales tax is also applied to the federal Goods and Services Tax.
In some countries, there are multiple levels of government which each impose a sales tax. For example, sales tax in Chicago (Cook County), IL is 10.25%--the highest in the nation--consisting of 6.25% state, 1.25% city, 1.75% county and 1% regional transportation authority. And in Baton Rouge, Louisiana, the tax is 9%, consisting of 4% state and 5% local rate.1 In Tennessee the sales tax is 9.25%, due to the lack of a state income tax. However, there is no nationwide sales tax in the United States.
