Understanding Tax Exemptions and Taxables
Use tax definition
The use tax acts as a complement to the sales tax and is imposed in a situation where no sales tax was
collected by the vendor and paid by the purchaser.
SALE
Use tax is generally imposed on the use, storage, consumption, or importation of tangible personal property or
services in the state, where no sales tax was paid.
Originally the use tax was intended to discourage purchasers from buying from vendors (out-of-state) who did
not have to collect sales tax because they did not have sufficient contacts in a particular state. "Buy Local!"
KPMG
The use tax imposes a tax equal in amount to the sales tax that would have been imposed on the sale of the
property or services in question if the sale had occurred within the state's taxing jurisdiction.
The purchaser generally bears the burden of the use tax.
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