 A good would be considered " used " and not taxable if a consumer already owns it before the FairTax takes effect or if the FairTax has been paid previously on the good , which may be different from the item being sold previously . Personal services such as health care , legal services , financial services , and auto repairs would be subject to the FairTax , as would renting apartments and other real property . Food , clothing , prescription drugs and medical services would be taxed . ( State sales taxes generally exempt these types of basic @-@ need items in an effort to reduce the tax burden on low @-@ income families . The FairTax would use a monthly rebate system instead of the common state exclusions . ) Internet purchases would be taxed , as would retail international purchases ( such as a boat or car ) that are imported to the United States ( collected by the U.S. Customs and Border Protection ) . 
