Short Answer 
Sales tax is an indirect tax applied to goods and services, collected by sellers at the point of purchase and later submitted to the government. Unlike progressive taxes, sales tax does not vary with income, potentially burdening lower-income individuals more significantly.
Step 1: Understanding Sales Tax
Sales tax is classified as an indirect tax, which means it is applied to the sale of goods and services rather than directly on personal income. The seller collects this tax at the time of purchase and later submits it to the government. Thus, consumers don’t pay the tax directly to tax authorities; it’s included in the purchase price of items.
Step 2: Characteristics of Sales Tax
Unlike other taxes, sales tax does not change based on an individual’s income. It is not progressive, which means that it does not increase as a person’s income increases. This can disproportionately affect lower-income individuals who spend a larger percentage of their income on taxable goods and services.
Step 3: Summary of Tax Types
To better understand where sales tax fits in the taxation system, consider the following types of taxes:
- Direct Tax: Imposed directly on income (e.g., income tax).
- Indirect Tax: Imposed on the sale of goods and services (e.g., sales tax).
- Progressive Tax: Tax rate increases as income increases (e.g., income tax).