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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Bucket-wheel excavators mine rare earth materials on Ukrainian soil on February 25, 2025, in the Zhytomyr region of Ukraine. (Kostiantyn Liberov via Getty Images)