What is a use tax?

Question

What is a use tax, and when does a business or individual need to pay it? How is use tax different from sales tax, and what types of purchases can trigger a use tax obligation? Share your understanding and examples with the community.

Ashton Mercer · Answer

A use tax is a tax on goods or services purchased without sales tax, typically from another state, when they are used, stored, or consumed in your state.

Kevin · Answer

Use tax refers to a type of tax levied on purchases made outside one’s state without paying sales taxes on those goods that are later used, stored, or consumed in one’s state.

Alex · Answer

Use tax is that type of tax which is imposed when someone buys something in another state and does not pay sales tax for that item, which is then used, kept or consumed in his/her state.

Answers