Use Tax
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An Use Tax is an Excise Tax on items that were bought outside of a taxation authority and so escaped a consumption tax.
- Context:
- It can (often) be enforced for large items, such as automobiles and boats.
- …
- Counter-Example(s):
- See: ad valorem Tax, Duty Tax, Tangible Good, Excise Tax.
References
2016
- https://en.wikipedia.org/wiki/Sales_tax#Types
- Use tax, imposed directly on the consumer of goods purchased without sales tax, generally items purchased from a vendor not under the jurisdiction of the taxing authority such as a vendor in another state). Use taxes are commonly imposed by states with a sales tax but are usually enforced only for large items such as automobiles and boats.
- (Wikipedia, 2016) ⇒ http://wikipedia.org/wiki/use_tax Retrieved:2016-3-21.
- A use tax is a type of excise tax levied in the United States by numerous state governments. Use tax is essentially the same as - and is assessed at the same rate as - sales tax, but is applied not where a product or service was sold, but rather where a merchant bought a product or service then converted it for its own use but without having paid tax when it was initially purchased. Since it was not "sold" the product is not imposed a sales tax (which is collected at the time of sale) but instead the transfer imposed a use tax (which is collected when the taxed item is converted from inventory into something that is "used" by the seller). In short, the seller is presumed to have bought the (untaxed) item from themselves and at that time must pay use tax in lieu of sales tax.
2015
- http://www.investopedia.com/terms/u/use-tax.asp
- QUOTE: A sales tax on purchases made outside one's state of residence on taxable items that will be used, stored or consumed in one's state of residence and on which no tax was collected in the state of purchase. If the purchase would have been taxed had it been made in the purchaser’s state of residence, then use tax is due. The use tax rate is the same as the resident's local sales tax rate, which includes both state and local sales taxes. A resident who does not pay use tax may be subject to interest and penalties. ...
For example, California residents are required to pay sales tax on purchases of merchandise such as furniture, gifts, toys, clothing, vehicles, mobile homes and aircraft. If a Californian purchases clothing from a California retailer, the retailer will collect sales tax from the purchaser at the time of purchase and remit it to the tax authorities. No additional tax will be due.
- QUOTE: A sales tax on purchases made outside one's state of residence on taxable items that will be used, stored or consumed in one's state of residence and on which no tax was collected in the state of purchase. If the purchase would have been taxed had it been made in the purchaser’s state of residence, then use tax is due. The use tax rate is the same as the resident's local sales tax rate, which includes both state and local sales taxes. A resident who does not pay use tax may be subject to interest and penalties. ...