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.

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Defense Secretary Pete Hegseth greets Supreme Allied Commander Europe General Christopher Cavoli before the North Atlantic Council meeting of defense ministers on February 13, 2025, in Brussels, Belgium. (Omar Havana via Getty Images)