In short
Use tax is owed by a buyer on taxable purchases on which the seller didn't collect sales tax, usually purchases from out-of-state sellers. The rate generally equals the sales tax rate.
Key takeaways
- Businesses self-assess and pay use tax on such purchases.
- Since the Wayfair decision in 2018, remote sellers with enough sales into a state must collect sales tax, reducing use tax exposure.
- Credit is usually given for sales tax paid to another state.
Where it's tested
TCP: Multi-Jurisdictional & International Basics — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
After the Supreme Court's 2018 decision in South Dakota v. Wayfair, a state can generally require a remote seller to collect sales tax when the seller: