Luxury Tax - History

History

In the United States, many states used to collect state sales tax through the use of "luxury tax tokens" instead of calculating a percentage to be paid in cash like the modern-day practice. Tokens could be purchased from the state and then used at checkout instead of rendering the sales tax in cash. Presumably, the purpose of the practice was to remove the incentive for stores and businesses to avoid reporting income. Some tokens were copper or base metal while some were even plastic.

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