Final answer:
The sales tax rate is determined by state governments, and while companies collect the tax, they do not keep it as revenue but remit it to the state, possibly keeping a small portion to cover administrative costs.
Step-by-step explanation:
The sales tax rate is usually determined by state governments. The state sets the percentage of sales tax to be collected on the sale of consumer goods and services within its jurisdiction. This rate can vary widely across different states and even within different jurisdictions within a state. For example, Minnesota does not levy a sales tax on clothing. Companies are required to collect this tax from consumers at the time of sale and then remit it to the state. It is important to note that the company does not keep the sales tax as earned revenue; instead, they act as collectors on behalf of the state. In some instances, businesses may be allowed to retain a small portion of the sales tax to cover administrative costs associated with tax collection.