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afbwell
New Member

For "Use Tax", under your state taxes. Should this include rent, bills, etc or is this just for purchases?

 
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GeoffreyG
New Member

For "Use Tax", under your state taxes. Should this include rent, bills, etc or is this just for purchases?

A state typically charges a "Use" tax on goods purchased in another state and then brought back across the border into your home (resident) state,  where your resident state's own Sales taxes have not been paid on those same goods.  So, in essence, a Use tax is for all practical purposes simply a Sales tax by another name; but one that applies just to goods bought out-of-state and brought back into your home state.

It does not include services purchased or goods consumed out of state (such as restaurant meals or haircuts, just for some examples), nor does it include utility bills, rent, or any other such items.

That said, the calculation and payment of a state's Use tax is typically done on the "honor system" where it is up to each state income tax filer to self-declare and calculate their own Use tax.  This is mostly in contrast to the way that a Sales tax normally works when you buy goods in-state, where the Sales tax is typically applied to the cost of the purchase directly at the cash register.

Thank you for asking this question.

View solution in original post

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GeoffreyG
New Member

For "Use Tax", under your state taxes. Should this include rent, bills, etc or is this just for purchases?

A state typically charges a "Use" tax on goods purchased in another state and then brought back across the border into your home (resident) state,  where your resident state's own Sales taxes have not been paid on those same goods.  So, in essence, a Use tax is for all practical purposes simply a Sales tax by another name; but one that applies just to goods bought out-of-state and brought back into your home state.

It does not include services purchased or goods consumed out of state (such as restaurant meals or haircuts, just for some examples), nor does it include utility bills, rent, or any other such items.

That said, the calculation and payment of a state's Use tax is typically done on the "honor system" where it is up to each state income tax filer to self-declare and calculate their own Use tax.  This is mostly in contrast to the way that a Sales tax normally works when you buy goods in-state, where the Sales tax is typically applied to the cost of the purchase directly at the cash register.

Thank you for asking this question.

View solution in original post

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