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When it comes to complaining, not all taxes are created equally. You, me and strangers we talk to on the street will go ballistic when the income tax is mentioned. What about the sales tax? Most people just shrug their shoulders because they don't really know what it is all about.

The sales tax is known as a consumption tax. What does this mean? It means you must intend to consume something before you will be forced to pay it. Now, consume is obviously defined very broadly, but there is no doubt that a transaction must take place. In most cases, sales taxes are collected by the seller and then paid over to the relevant government agency.

There is no federal sales tax per se. There are federal sales taxes on specific items like gasoline, but no general retail sales tax as we are discussing in this article. The highest sales tax as of this article is in Chicago, where state, county and city sales tax rates total over 10 percent! A few states have similarly high sales tax rates across the board, but usually because they do not collect income tax. Arizona and Florida are examples.

So, why should you care about sales tax? Well, there is a war that is underway on the subject. The issue? The internet. A transaction that occurs on the web is taxable. The question is where. In most states, the company selling does not have to pay sales tax if there is no jurisdiction. In such cases, the buyer is supposed to pay use tax. Yes, you are supposed to report that purchase of a book from Amazon and send in a check to your state tax agency.

As you can imagine, the use tax as applied to the web is mostly useless. Going after the people who vote you into office makes most politicians a bit queasy. As a result, they've turned their attention towards the online businesses. Many states are now passing laws that say if an online company has an affiliate in the state and does a sale, then that company has submitted to the jurisdiction of the state and must pay taxes! Amazon, in fact, has terminated all of its affiliates in New York to prevent this from happening!

Sales tax isn't that hard to grasp. How it will work out when applied to the web is another matter entirely. When the debate starts getting media attention, you'll understand what they are talking about. Yep, a consumption tax!