All of us shop on Amazon at some point, mostly because it is easy to find things and often what we are looking for can’t be found elsewhere. We also think isn’t it great that we don’t pay sales tax on most of those purchases. Well that is where use tax comes into play. Anytime you don’t pay sales tax, or pay under the amount for your area, you are required to pay use tax.

The State normally does not pursue individuals for use tax; however, they can and they have, in the past. It is usually businesses the State audits for sales tax. This is especially common on certain industries, especially those that are cash intensive such as the cannabis businesses. For individuals you are supposed to file an annual return and remit the use tax. For businesses, it is due every month on the 20th of the month, for the prior month, with several exceptions. Normally it is filed on the same form as your sales tax each month.  Some states have different requirements and some just put it on the income tax forms, so make sure to check your state regulations or give us a call if you need help figuring it out.

To calculate the use tax, just add up all your purchases of material goods that are used in your household or business. If they are re-sold or are used to make something else such as a flavoring for a candy, then you back those out because when the product is actually sold to the end user it will be due.

But how do you prove you paid sales tax and are not subject to use tax? That is easy – KEEP YOUR RECIEPTS. The receipt will have sales tax listed separately proving it was already paid. The tricky ones are those items bought on your behalf by someone else such as a contractor. In that case, make sure your contractor either gives you copies of all the receipts, or breaks out the sales tax portion on his invoice to you. In other words, KEEP YOUR RECIEPTS.