Sales tax is generally based on:

Sales tax is a regulatory measure imposed by governments on the sale of goods and services, and it is typically calculated as a percentage of the selling price. When a consumer purchases an item, the sales tax is added to the final cost based on that item's price. This means that the higher the selling price, the more sales tax will be applied, reflecting a direct correlation between the price of goods and the amount of tax due.

This system is designed to be straightforward; consumers only need to know the selling price to determine the total cost, including tax. It does not depend on factors such as the total revenue of the business, the income of the seller, or the profit margin of products, which are more related to the financial performance or operational aspects of the business rather than the transaction taking place at the point of sale. Therefore, focusing on the percentage applied to the selling price captures the essential nature of how sales tax functions in practice.