Consumer use tax

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Consumer user tax is a consumption tax. It can be thought of as sales tax which is collected and remitted by the buyer rather than the seller.

Sellers typically collect and remit sales tax to government agencies such as a state Department of Revenue. If tangible personal property is subject to sales and use tax but sales tax is not collected by the seller, it becomes the responsibility of the buyer to remit the appropriate amount of consumer use tax. Goods and services are subject to either sales tax or use tax, but not both.

Consumer use tax is due when:

  • when remote sellers (selling via the Internet, by phone, or through catalogs) do not collect sales tax on taxable tangible personal property and the buyer resides in a state with sales tax;
  • when a buyer purchases taxable tangible personal property in a different state -- one with no sales tax or a rate lower than the rate in the state of residence -- and brings the item back into the home state to use or store.
  • when a purchase is made from someone not entitled to collect sales tax, such as a private party through Craigslist.

In states with a state income tax, consumer use tax is typically reported and remitted as part of filing a state return. In states without a state income tax, there may be other methods. For example, Washington State has a Consumer Use Tax Return for this purpose.


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