Final answer:
Retail sales generally include the purchases of goods and services by consumers for personal use and the sales taxes imposed on these transactions. Non-consumer expenditures, like companies buying equipment or business borrowing, are not considered retail sales. Items like school supplies that students purchase would be included in retail sales figures, including any sales tax charged.
Step-by-step explanation:
Retail Sales and Taxes
Retail sales are typically understood to include the purchase of goods and services by the end consumer for personal use. These transactions are known to contribute to the economic indicator gross domestic product (GDP). When thinking about what is included in retail sales, it's important to consider the sales taxes that are applied to such transactions.
Sales taxes are often imposed on retail sales as a percentage of the sale and can vary depending on the type of item and the tax jurisdiction. In the United States, many states exempt necessities such as food and medicine from sales taxes. Still, items such as school supplies bought by students are subject to sales taxes and therefore included in the total transaction value of retail sales. On the other hand, taxes collected are a component of government revenue and not included in the measurement of business-to-consumer retail transactions.
Transactions that do not count as retail sales include companies buying new equipment, borrowing by businesses, and other non-consumer expenditures. These types of transactions are considered to be part of business investment, financial activities, or intermediary transactions, all of which do not fall within the scope of retail sales.