[bradleyjg]

That would really strongly encourage vertical integration.

Consider a company that owns oil wells, pipelines, refineries, and gas stations. It never pays sales tax on its petroleum products. Only the final consumer does on the gasoline he buys.

A competitor network made up of independent parts has an oil drilling independent pay sales tax after it sells crude to a trading firm, the pipeline owner pays sales tax on the money it gets from the driller for the use of its pipeline, the trading firm pays sales tax when it sells the crude to a refiner, the refiner pays sales tax when it sells the oil to an independently owned gas station, and finally the end consumer pays the same sales tax as the integrated firm when it sells to the end user.

Countries that raise significant revenue from sales taxes generally use a VAT (value added tax) to avoid this problem.

[humanrebar]

...and it's worth noting that the VAT is very susceptible to judgement calls and therefore lobbying by special interests and weird edge cases where canned tomatoes get one tax rate and fresh ones another.