Use Tax for Business

When an individual purchases an item within their resident state, full sales tax would be collected when the purchase is made. Use tax is similar to a sales tax. For businesses, it could be computers, equipment, or tools purchased without paying sales tax upfront. Use tax is applied when making out of state purchases where the purchaser’s resident state sales tax does not apply. The purchase can occur over the phone, mail or online. For example, San Francisco has a sale tax of 8.75% and Oregon doesn’t have a sale tax. If a business from San Francisco were to purchase equipment from Oregon, they would not pay any sales tax for Oregon but would have to pay the 8.75% use tax in San Francisco. It is the business owner’s responsibility to report and submit payment.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.