Question: What is Use Tax?
Answer: Use tax is a form of sales tax designed to distribute the tax burden fairly among consumers and assure fair competition between in-state and out-of-state businesses.
For example, You live in New York City where there is an 8.875% sales tax on general merchandise. You decided to buy a $1,000 TV on NewEgg website (based in California) where they charge 0% sales tax for out-of-state residents. You saved $88.75 on taxes if you were to shop online. That is the use tax. You purchased from an out-of-state retailer who didn’t charge sales tax that was meant for use in-state.
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