<P> VAT is usually administrated by requiring the company to complete a VAT return, giving details of VAT it has been charged (referred to as input tax) and VAT it has charged to others (referred to as output tax). The difference between output tax and input tax is payable to the Local Tax Authority . </P> <P> Many tax authorities have introduced automated VAT which has increased accountability and auditability, by utilizing computer - systems, thereby also enabling anti-cybercrime offices as well . </P> <P> Sales taxes are levied when a commodity is sold to its final consumer . Retail organizations contend that such taxes discourage retail sales . The question of whether they are generally progressive or regressive is a subject of much current debate . People with higher incomes spend a lower proportion of them, so a flat - rate sales tax will tend to be regressive . It is therefore common to exempt food, utilities and other necessities from sales taxes, since poor people spend a higher proportion of their incomes on these commodities, so such exemptions make the tax more progressive . This is the classic "You pay for what you spend" tax, as only those who spend money on non-exempt (i.e. luxury) items pay the tax . </P> <P> A small number of U.S. states rely entirely on sales taxes for state revenue, as those states do not levy a state income tax . Such states tend to have a moderate to large amount of tourism or inter-state travel that occurs within their borders, allowing the state to benefit from taxes from people the state would otherwise not tax . In this way, the state is able to reduce the tax burden on its citizens . The U.S. states that do not levy a state income tax are Alaska, Tennessee, Florida, Nevada, South Dakota, Texas, Washington state, and Wyoming . Additionally, New Hampshire and Tennessee levy state income taxes only on dividends and interest income . Of the above states, only Alaska and New Hampshire do not levy a state sales tax . Additional information can be obtained at the Federation of Tax Administrators website . </P>

Which of these is the best description of a tax base