How to I know how much I spent on online or out of state purchases? Is it important for my tax refund?

[BillM223]

Most states now charge what's called a "Use Tax". This is a type of sales tax on items bought out of state but which are use or consumed within the state.

This tax is a way to collect sales taxes that were lost because you ordered stuff on the Internet or from a mail order house that didn't charge sales tax.

Note that more and more Internet stores are charging sales tax so you don't have to report those purchases.

Also note that you typically don't have to pay your state's Use Tax on an item for which you were charged the local sales tax of the vendor's state.

Yes, it is important for your return because if you state that you don't owe any Use Tax when you actually do, the state auditor will penalize you. They will ask for receipts and I suspect that with some of the larger Internet sellers, they have agreements to report sales.

For your state's rules, do an Internet Search for "[your state's name] Use Tax".

[LWBrown]

Hello. I bought a Nikon camera from Adorama in 2019 ($2499.00), there was no sales tax (don't know why). Does this only get included on my Virginia state return, or does it also get included on my 1040?

[ColeenD3]

Use tax is only for states. It is not entered on the 1040 unless it is a business expense.

[LWBrown]

Thank you for the prompt reply. Therein lies my problem. I need to file an amended return because Adorama didn't take taxes on the $2500 camera I bought last year. I didn't catch this until weeks after the fact. I have a small photography business on the side, and I used the camera as an asset on my initial 1040 that I have already filed. 

So when going through Turbo Tax to create the amended return, I see where I can put that amount on my VA 760 return, but for the life of me I can't find it on the 1040 anywhere! Would you happen to know exactly where the location of that is on the 1040?

[JohnW222]

You don't need to include this on your federal return, only your state filing.

[LWBrown]

I'm guessing because it wasn't a 'business expense'? I filed it on Form 4562.

So I only have to file an amended state form then? (VA 760)

Thanks!

[AmyC]

Correct.