A sales tax can be either origin or destination based. In the origin-based model, the tax is the tax rate and rules in the seller’s location, and in the destination-based model, the tax rate and rules are those in the buyer’s location. This report compares the two models.
Caption
US Secretary of War Pete Hegseth and Japan’s Minister of Defense Shinjiro Koizumi inspect a guard of honor on October 29, 2025 in Tokyo, Japan. (Getty Images)