It's worse that that. First, all of the money comes from the buyer; that's why they're called the buyer. It goes to the seller who pays the closing costs. So the entire BPP = Buyer's Price of House is (Seller's Price of House + Closing Costs). The buyer will then pay sales tax on BPP. Yes, you are paying sales tax on the closing cost. It's worse still. You then pay property taxes on the BPP which means that you pay property taxes on the closing costs.

You can and I did negotiate the BPP and then tell the seller that you will be paying the closing costs yourself and deducting them from the BPP. Then you avoid paying sales tax on the closing cost service and paying property tax on the closing cost service.

Oh, and don't even get me started on the financial services industry scam of mortgage interest deductions.