FairTax Act of 2025

The new national sales tax will add an extra 23% to the price of most things you buy in the United States starting in 2027. This means if you buy something that costs $10, you'll have to pay an extra $2.30 for the tax, making it $12.30 total.

However, there are some exceptions. If you buy things that are under $400 or up to $1,200 in a year for personal use, you won't have to pay this tax. The goal of this tax is that it only gets paid once when you buy things, making it easier for everyone to understand.

So, if the law passes, you'll see higher prices for many items because of this new tax.

The Family Consumption Allowance is a monthly money payment that certain families can get to help them pay for sales taxes on things they buy. To qualify for this allowance, your family needs to be considered a "qualified family," which generally means you meet specific requirements, such as income level.

The amount of the payment is based on the sales tax rate and a specific poverty level. This means if your family meets the qualifications, you would get a check every month to help cover some of the costs of the sales tax when buying things.

In simpler terms, if you and your family fit certain rules about money and needs, you can receive help through this allowance each month to ease your expenses!

To register to get monthly sales tax rebates under this bill, you need to sign up as a "qualified family" with the sales tax administering authority. Here’s how it works:

1. Application: You must fill out an application to provide your information, such as family size and who will receive the rebate.

2. Age Requirement: The person designated to receive the rebate must be at least 18 years old.

3. Annual Registration: You need to register once a year, and if you forget to register, you can still get the payments for up to 6 months after if you fix your registration.

4. Timing of Payments: Rebates will be sent out by mail on or before the first business day of the month for which the rebate is being provided.

Make sure to keep your registration updated to continue receiving the rebates! If you have more questions, you might want to ask an adult to help you with the details.

Yes, based on the bill, you will have to pay taxes on things you currently don't pay taxes on now. The bill introduces a national sales tax that will apply to many goods and services that were not previously taxed. It aims to tax the consumption of items and services in the U.S. without exception, meaning almost everything you buy in the future could have a tax added to it. So, if you're getting items or services now without paying taxes, that will likely change.

This bill protects your privacy as a taxpayer by treating your tax information confidentially. It states that any tax-related details, like your income and payment information, must be kept secret. No one from the government can share this information without permission, and there are serious punishments, like fines or even jail time, if someone breaks these privacy rules. The bill also emphasizes the importance of respecting individual rights and being fair when dealing with taxpayers. So, if this bill becomes law, your personal tax information will be safe and cannot be shared with just anyone.

Under the new sales tax system proposed in the bill, certain transactions will have different tax rules. Here are some types of transactions that might be affected:

1. Business Purchases: If someone buys property or services for business use, they might not have to pay the sales tax immediately. This is called an "intermediate sale." Instead, they could potentially receive a credit for the tax they paid when buying it for business purposes.

2. Export Sales: If a person buys something to take out of the United States, they can avoid paying sales tax on that item. This is because the law treats items that are exported differently.

3. Employee Discounts: If a company sells products to its employees at a discount, and the discount is larger than 20%, the tax rules change, and the company has to report the discount amount.

4. Bartering: If people trade goods or services instead of using money, they will have to pay taxes based on the fair market value of the items they traded.

5. Mixed Use Property: If someone uses a property for both personal and business purposes, they might only get taxed on the part used for business.

These different rules help ensure that certain transactions are treated fairly under the new tax system, aiming to reduce double taxation while encouraging business and export activities.

The bill says that states will team up with the federal government to manage new sales taxes. They will be responsible for collecting and sending the taxes paid on goods and services to the federal government. States can keep a small portion of the collected taxes as a fee for their work. They will need to follow certain rules and deadlines for this, and they need to report how much tax they collected regularly.

If a state doesn't follow these rules or fails to send the money on time, the federal government can step in and take over managing the tax in that state. There will also be laws in place to make sure states work together smoothly and share information as needed.

If you don't follow the new tax rules set by this bill, you could face some serious consequences. Here are a few things that might happen:

1. Penalties: If you are supposed to collect taxes but don’t, or if you willfully ignore the rules, you could get fined. The fines can be as much as 50% of the amount of tax you didn’t collect or $1,000, whichever is more.

2. Late Fees: If you are late in paying the taxes that you are responsible for, you might have to pay a penalty that will increase over time, up to a maximum of 24%.

3. Criminal Charges: If you are found to be very reckless or willfully ignoring the tax rules, you could face criminal penalties, which could include going to jail for up to two years.

4. Liens and Seizures: If you still don’t pay your taxes after being notified, the government can take your property or even your earnings to cover the amount you owe.

So, it's really important to follow the new tax rules to avoid these troubles!

The bill will change how taxes work in the U.S. by replacing income taxes with a sales tax. This means when your family buys things like clothes or groceries, you'll pay a tax on those purchases.

1. Sales Tax Instead of Income Tax: Your family won't pay income tax anymore. Instead, a tax of 23% will be added to the price of things you buy. So, if something costs $10, you'll pay $12.30.

2. Monthly Sales Tax Rebate: To help families with this new tax, the government plans to give monthly rebates to families, based on how much the tax is and the number of people in your household. This could help balance out some of the extra costs from the new sales tax.

3. Exemptions for Small Purchases: The bill allows small purchases (like up to $400 per year for a few things) to be tax-free, which means some of your family's buying might not cost extra.

Overall, your family's budgeting will need to adjust to this new tax because things you buy will cost a bit more. But with the rebates and some exemptions, it may not be as tough as it sounds.

Yes, there will be places where you can find help if you have questions about the new tax system. The bill mentions that there will be a sales tax administering authority, which is a State agency or the Secretary of the Treasury, that people can contact for inquiries about taxes. Additionally, the Problem Resolution Offices will be established to assist people with their concerns, and each person will have the right to get help from professional advisors at their own expense. This means if you have questions, you can reach out to these offices for guidance.