Question

Say that you are about to make a major purchase and would like to save money on sales tax. Which of these is a viable way to reduce the amount you will pay on sales tax?
a.
Sales tax is a tax like any other, so you can claim additional dependents and get a deduction on it.
b.
Businesses are allowed to charge a 1% fee for automatically calculating sales tax for you, so you should calculate the sales tax out yourself.
c.
Sales tax varies by state, so you can travel to a state with a lower tax rate and make your purchase there.
d.
If you buy an item on credit, the credit bureau must pay the sales tax instead of you, so you should make your purchase using a credit card.

Answer 1

Correct answer: c.

Sales tax rates (and whether a state has sales tax at all) vary by state and locality, so making an in-person purchase in a lower‑ or no‑sales‑tax state can reduce what you pay at the register.

Important caveats:
- Many states require you to report and pay a “use tax” if you buy out of state but bring the item home, so you may still owe tax.
- For big purchases like cars, you’ll often pay registration or excise taxes when you register the vehicle at home.
- Online sellers may be required to collect your home state’s tax (post-Wayfair), so buying remotely won’t always avoid sales tax.
- Consider travel/shipping costs and any local fees — they can offset any tax savings.

The other choices are incorrect or misleading (a and d are false; b is not a general rule).