sales tax and value added tax

Sales tax and Value Added Tax (VAT) are both consumption taxes, but they are applied differently. Sales tax is typically charged at the point of sale to the final consumer, while VAT is levied at each stage of production or distribution, with businesses being able to reclaim tax paid on purchases. VAT is more common in countries outside the United States, while sales tax is predominantly used in the U.S. Understanding the difference is crucial for businesses to comply with local tax regulations