{"id":62,"date":"2010-07-27T18:53:37","date_gmt":"2010-07-27T23:53:37","guid":{"rendered":"http:\/\/www.accuratetax.com\/blog\/?p=62"},"modified":"2024-03-18T15:35:10","modified_gmt":"2024-03-18T15:35:10","slug":"sales-tax-use-tax-difference","status":"publish","type":"post","link":"https:\/\/www.accuratetax.com\/blog\/sales-tax-use-tax-difference\/","title":{"rendered":"Sales Tax Versus Use Tax \u2013 What\u2019s the Difference?"},"content":{"rendered":"\n

Most people are familiar with the term “sales tax”, because we’re required to pay it almost every time we make a purchase at a local store. (Unless you’re lucky enough to live in a state with no sales tax<\/a>.) A sales tax is typically a required percentage of the sale price of a good or service, that is paid by the purchaser at the time of the sale, and collected and remitted by the retailer. Sales taxes only apply to retail transactions – not wholesale ones – because they are a type of “consumption” tax.<\/p>\n\n\n\n

A “use tax” is not discussed as often, but states that have a sales tax generally also have a use tax. It’s a tax that is required to be paid and remitted by the purchaser on goods bought out-of-state, such as over the Internet or via mail order, when the seller doesn’t collect sales tax. Many people simply think that those purchases are tax-free, but they’re not!<\/p>\n\n\n\n

You may encounter this if you purchase a car in one state and bring it into your home state. Another possibility is that you purchase a vehicle and then move your residence to a new state within a certain time frame. When you attempt to register for a tag in your (new) home state, you may be required to pay them the difference in sales tax between the two states. <\/p>\n\n\n\n

Additional examples are provided by the Florida Department of Revenue<\/a>, quoted below. Of course, the laws vary in each state, but Florida’s is fairly representative:<\/p>\n\n\n\n