The State-by-State Guide to Use Tax

Alaska Use Tax

• Tax Base: Purchase price (Local level only)
  
  
• Inventory Withdrawals: Taxable (varies by borough)
  
  
• Fixed Assets: Taxable (varies by borough)
  
  
• Credit Allowed: Yes
  
  
• Notes:
• State Status: Alaska does not impose a use tax at the state level, but local governments (cities/boroughs) may levy it.
  
  
• Equality Rule: Local use tax rates must be equal to the local sales tax rate and may only be levied on buyers.
  
  
• Exemptions: Specific local exemptions include spacecraft property, refined fuel transfers, state construction contracts, and purchases made with food stamps/WIC.
  
  

Arizona Use Tax

• Tax Base: Sales price
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes
  
  
• Notes:
• Arizona uses the Transaction Privilege Tax (TPT) system. Use tax is the ‘complementary’ excise tax for the consumer.
  
  
• Manufactured Buildings: The taxable base is uniquely set at 65% of the sales price.
  
  
• Vehicle Registration: Proof of tax paid in the purchase state is required at registration, or Arizona use tax becomes due.
  
  

Arkansas Use Tax

• Tax Base: Sales price
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes
• Credits for taxes paid to other states are applied first to the state use tax, then pro rata to local jurisdictions.
  
  
• Notes:
• Officially titled the “Arkansas Compensating Tax.”
  
  
• The state is particularly strict about taxing repair parts and replacement machinery brought in from out-of-state.
  
  

California Use Tax

• Tax Base: Purchase price
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes
  
  
• Notes:
• The ‘Demonstration’ Loophole: While withdrawing inventory is usually taxable, demonstrating or displaying an item is exempt as long as it is still held for sale.
  
  
• Use tax generally applies to vehicles, vessels, and aircraft purchased from sellers who do not hold a California seller’s permit.
  
  

Colorado Use Tax

• Tax Base: Full purchase price. Includes all material, labor, service, and profit charged to the user.
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes
  
  
• Notes:
• Retail Delivery Fee (RDF): Colorado imposes a small fee (set at $0.28 for the 2025–2026 period) on most deliveries by motor vehicle. While the RDF is not subject to state sales tax, some Home Rule cities may tax it.
  
  
• Price Exclusions: You may exclude state/local sales tax and retail delivery fees from the taxable purchase price.
  
  

Connecticut Use Tax

• Use Tax Base: Sales price
  
  
• Inventory Withdrawals: Taxable. ‘Sale’ includes any withdrawal of property for delivery in-state for the purpose of transfer of title, exchange, or barter.
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes
• If the tax paid to another state is less than the CT tax, you owe the difference. If it is equal to or higher, no tax is due.
  
  
• Notes:
• Vessel Exemption (Sec. 12-413a): Use tax does not apply to vessels brought into the state exclusively for storage, maintenance, or repair between October 1 and May 31 of the following year.
  
  
• Resident Exemption: Purchases of $25 or less brought into the state by a resident for personal use (not business use) are exempt.
  
  
• Donation Exemption: Retailers are exempt from use tax on inventory withdrawn and donated to the US government, the state of CT, or a 501(c)(3) organization.
  

• US Gov Exemption: Property purchased from the US government is exempt unless it is "surplus property" or "contractor inventory." 

Delaware Use Tax

No sales tax, so use tax.

District of Columbia Use Tax

• Use Tax Base: Sales price
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes
  
  
• Notes:
• Rate Schedule: The tax rate 6.5% as of October 1, 2025, but will rise to 7.0% beginning October 1, 2026.

• Exemption Alignment: The use tax exemption is legally defined as being the same as the sales tax exemption.

Florida Use Tax

• Use Tax Base: Cost price
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes
• If you paid less than 6% to another state, you report the total FL tax due and claim a ‘Lawful Deduction’ for the amount paid elsewhere.
  
  
• Notes:
• Lease Conversion: If you convert property originally purchased for lease to your own use, tax is based on Fair Market Value at the time of conversion. If FMV is unknown, use the acquisition cost. (Note: The tax cannot be less than what would have been due on the original cost).
  
  
• Dealer License Plates: Dealers pay an annual use tax of $27 per dealer license plate. This covers the use of the vehicle for the year.
  
  
• Loaner Vehicles: Dealers who loan vehicles at no charge must accrue use tax based on the IRS Automobile Annual Lease Value Table.
  
  
• Repair Loaners: No use tax or rental surcharge is due on a replacement vehicle provided at no charge while a customer's car is being repaired/serviced.
  

Georgia Use Tax

• Use Tax Base: Cost price
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes
  • Subject to reciprocity (only allowed if the other state allows similar credits for taxes paid in GA).
    
    
• Notes:
  • The 6-Month Rule: 
    • < 6 Months: If the property was used for six months or less outside GA prior to first use inside GA, use tax is imposed on the purchase price.
    • > 6 Months: If used longer than six months outside GA, the use tax is based on the lesser of the purchase price or the fair market value.
      

• • Vehicle Exception: If a vehicle is subject to the Title Ad Valorem Tax (TAVT), no sales tax and use tax is due.
    
    
  • Manufacturing Exception: The sale, use, and storage of machinery/equipment necessary and integral to the manufacture of tangible personal property are exempt (O.C.G.A §48-8-3.2).
    
    

Hawaii Use Tax

• Use Tax Base: Purchase price (or landed value)
• If the purchase is consummated outside Hawaii (or there is no applicable purchase price), the base is the landed value of the property.
  
  
• Inventory Withdrawals: Taxable. (Note: Explicit rules are absent; treated as taxable to be conservative).
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes
  
  
• Note:
• Heavy Equipment Exception: The import of heavy equipment for ‘temporary use’ (defined as located in and used in Hawaii for 365 days or less) on a project is NOT subject to use tax.
  
  

Idaho Use Tax

• Use Tax Base: Purchase price
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes
  
  
• Notes:
  • Valuation: Tax is based on a recent sales price. Without proof of a recent price, tax is based on Fair Market Value.
    
    
  • Transient Equipment: A nonresident business bringing transient equipment into Idaho may elect to pay use tax on either:
   
  1. The Fair Market Value at the time it enters Idaho, OR
  2. The Fair Market Rental Value for the time it is kept in Idaho.
     

Illinois Use Tax

• Use Tax Base: Selling price or fair market value
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes
  
  
• While generally taxable, specific exemptions exist for: 
  1. Farm machinery and equipment
     
  2. Manufacturing machinery and equipment
  3. Graphic arts machinery and equipment
  4. Automatic vending machines
  5. Oil field exploration, drilling, and production equipment
  6. Coal exploration, mining, off-highway hauling, processing, maintenance, and reclamation equipment
  7. Aggregate exploration, mining, off-highway hauling, processing, maintenance, and reclamation equipment
     
     

Indiana Use Tax

• Use Tax Base: Sales price
  
  
• Inventory Withdrawals: Taxable. Refers to liability for tax following non-exempt use after an exemption certificate was issued.
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes
  
  
• Note:
• Legal Precedents: Liability for use tax on fixed assets (like motor vehicles) is reinforced by case law such as Asplundh Tree Expert Co. v. Ind. Dept. of State Revenue and Kenneth W. Nailliuex v. Ind. Dept. of Revenue.
  
  

Iowa Use Tax

• Use Tax Base: Purchase price
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes 

Kansas Use Tax

• Use Tax Base: Purchase price
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes
  
  

Kentucky Use Tax

• Use Tax Base: Sales price
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes
  
  
• Note:
  • Fixed Asset Exception: While generally taxable, there is an exception for ‘Machinery for New and Expanded Industry.’
     

Louisiana Use Tax

• Use Tax Base: Sales price / Cost price
• The base is the Sales Price when the property is sold at retail in the state.
• The base is the Cost Price when the property is not sold but is used, consumed, distributed, or stored for use/consumption in the state.
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes
• Subject to reciprocity.
  
  
• Note:
• Reciprocity: Credit for taxes paid to another state is granted only if that other state grants a similar credit for taxes paid in Louisiana.

Maine Use Tax

• Use Tax Base: Purchase price
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes
  
  

Maryland Use Tax

• Use Tax Base: Purchase price
  
  
• Inventory Withdrawals: Taxable (Treated as taxable in the absence of explicit rules).
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes
  
  
• Notes:
• Taxable Price Definition: “Taxable price” means the value in money of the consideration paid without deduction for any expense or cost, including labor, service, materials used, or digital products sold.
  
  
• Inventory Withdrawal: Explicit rules are not found; therefore, it is treated as taxable to be conservative.

Massachusetts Use Tax

• Use Tax Base: Sales price 
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Depends
• Subject to reciprocity (only granted for sales tax paid to another state if that state has a reciprocal sales/use tax agreement with Massachusetts).

Michigan Use Tax

• Use Tax Base: Cost price
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes 

Minnesota Use Tax

• Use Tax Base: Purchase price
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes

Mississippi Use Tax

• Use Tax Base: Purchase price
• The purchase price or value of the property at the time imported into Mississippi, including any additional charges for deferred payment, installation, service charges, and freight to the point of use within the State.
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes
  
  
• Notes:
• Credit Exceptions: Persons using business property in Mississippi that has been used by them in other states are entitled to a credit for taxes paid equal to the aggregate of all such state rates multiplied by the value of the property at importation. (Value is cost less straight-line depreciation, not to go below 20% of cost).
  
  
• Acquired Property Credit: Persons using business property in Mississippi acquired from another person who used it in other states are entitled to a credit equal to the applicable rate in the state of last prior use multiplied by the value at importation.
  
  
• Storage Exclusion: No credit is allowed for Use Tax paid to another state for tangible personal property that has been only stored or warehoused in the other state and the first use occurs in Mississippi.
  
  
• Vehicle Exclusion: No credit is allowed for Sales or Use Tax paid to another state on the purchase price or value of automobiles, motor homes, trucks, trailers, boats, and motorcycles imported and first used in Mississippi.

Missouri Use Tax

• Use Tax Base: Purchase price
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes 

Montana Use Tax

No sales tax, no use tax.

• Notes:
• Local Option: Certain communities in Montana (population < 5,500) may levy a resort and local option sales/use tax to fund local transportation.
  
  
• Resort Tax: Applies to the retail value of goods and services sold by certain businesses, including lodging, camping, restaurants, and destination recreational facilities (ski resorts). Luxury products are also usually subject to the resort tax.

Nebraska Use Tax

• Use Tax Base: Sales price
• The amount of use tax is computed by multiplying the sales price of the property by the applicable tax rate in effect at the time of first use.
  
  
• Sales Price Definition: Means the total amount of consideration for the property received and includes cash, credit, property, and services rendered without any deduction for the cost or other expenses of the seller, charges for delivery, installation, or any other amounts charged by the seller to complete the sale.
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes 

Nevada Use Tax

• Use Tax Base: Sales price
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes
  
  
• Notes:
• Tax Base: An excise tax imposed on storage, use, or other consumption in the state.
  
  
• Exemptions: Non-taxable items include unprepared food, farm machinery/equipment, newspapers, and finance charges on credit sales.
  
  
• Service Charges: Installation and repair/reconditioning services are not taxable if listed separately on the invoice.
  
  
• Shipping Rules: As of May 2009, transportation, shipping, and postage charges are not taxable if stated separately on the invoice.
  
  
• Convention Exception: Effective July 1, 2007, items with a nominal value given away at conventions, trade shows, and public events are not subject to Consumer Use Tax.

New Hampshire Use Tax

No sales tax, no use tax.

• Notes:
• Meals and Rooms Tax: While there is no general sales/use tax, a tax applies to rooms and meals costing 36 cents or more, as well as car rentals.
  
  
• Collection: This tax is imposed on the customer but collected and remitted by the business operator.

New Jersey Use Tax

• Use Tax Base: Purchase price
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes
  
  
• Motor Vehicle Exemptions: A vehicle purchase is exempt if it is:
  
  • A gift (no consideration paid).
  • Purchased by a nonresident with no place of abode in NJ.
  • Purchased by an exempt organization (Form ST-5) for exclusive use.
  • Purchased by a recognized Foreign Diplomat.
  • Purchased for an exempt use (e.g., limousine service).

New Mexico Use Tax

• Use Tax Base: Property value
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes
  
  
• Notes:
• Tax Rate: The compensating tax rate is 5.125% of the value of the property (or 5.00% for services) at the time of acquisition/introduction into NM or conversion to taxable use, whichever is later.
  
  
• Value Definition: "Value" refers to the adjusted basis of the property for federal income tax purposes. If no adjusted basis exists, a "reasonable value" is used.

New York Use Tax

• Use Tax Base: Purchase price
• Due on the consideration given (money, barter, assumption of liabilities, fees, etc.), including shipping/handling charges.
  
  
• Inventory Withdrawals: Exempt / Taxable (See Notes)
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Depends
  
  
• Notes:
• Rate Rule: The rate is generally determined by where the business takes delivery or where it uses the item, whichever is higher.
  
  
• Manufacturing Exemption: Machinery/equipment used directly and predominantly in the production of tangible personal property for sale can be exempt. (Administration/distribution equipment does not qualify).
  
  
• Promotional Materials Exemption: Purchases of promotional materials given away for free (and related services) may be exempt if Form ST-121.2 is used.
  
  
• Promotional Definition: Includes advertising literature, free gifts, complimentary maps, annual reports, and paper/ink furnished to a printer. It does not include billing invoices or account statements. 

North Carolina Use Tax

• Use Tax Base: Purchase price
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes
  
  
• Note:
• Definitions: “Purchase price” has the same meaning as “sales price” when applied to an item subject to use tax.
  
  

North Dakota Use Tax

• Use Tax Base: Purchase price
  
  
• Inventory Withdrawals: Exempt / Taxable
  
  
• Fixed Assets: Exempt / Taxable
  
  
• Credit Allowed: Yes

Ohio Use Tax

• Use Tax Base: Purchase price
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes
• Ohio permits use tax credits for sales tax and use tax paid to another state, provided the taxpayer is not entitled to a credit/refund in that state. If the tax paid elsewhere is less than Ohio's, the difference is due.
  
  
• Notes:
• Price Definition: "Price" means the total amount of consideration (cash, credit, property, services) without deduction for the cost of the property, delivery, or installation.
  
  
• Inventory Withdrawal: A vendor who purchases items tax-free for resale but uses them in a taxable manner must accrue use tax on the price.
  
  
• Promotional Items: Generally, the distribution of promotional items and gifts at no charge is not subject to sales tax. However, items given to attendees who paid an admission fee (with the expectation of receiving the item) are considered a "sale for resale" and are exempt.
  
  
• Motor Vehicles: Use tax is owed on vehicles purchased outside Ohio for use in Ohio if sales tax was not paid. Exemptions exist for government entities, farming, interstate commerce, and vehicles already taxed in another jurisdiction (credit applies).
  
  

Oklahoma Use Tax

• Use Tax Base: Purchase price
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes. Credit is given for tax paid to another state equal to or in excess of the OK tax, provided the other state grants a "like credit" for taxes paid in Oklahoma.
  
  
• Notes:
• Tax Rate: The excise tax rate is 4.5% of the purchase price.
  
  
• Storage Exception: Tax is not levied on property intended solely for use in other states, which is stored in Oklahoma pending shipment, or temporarily retained for fabrication/repair. Tax is paid at importation and credited upon removal.
  
  
• Motor Vehicles: The tax associated with a motor vehicle is paid by the consumer at the time the motor vehicle excise tax is due.
  
  

Oregon Use Tax

No sales tax, no use tax.

• Notes:
• General Status: Generally, Oregon does not impose a sales tax and use tax, but it does impose a Vehicle Use Tax on vehicles purchased from dealers outside of Oregon that must be registered/titled in the state.
  
  
• Retail Sales Price: Includes total price, dealer preparation (rustproofing, etc.), transportation/delivery fees, and accessories/parts.
  
  
• Exclusions: Separate discounts/rebates and cash down payments/trade-ins are excluded from the taxable retail sales price.

Pennsylvania Use Tax

• Use Tax Base: Purchase price
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes
• Pennsylvania grants a credit for sales tax paid to another state, provided the tax is legally due and paid, and that state offers a reciprocal credit to Pennsylvania.

Rhode Island Use Tax

• Use Tax Base: Purchase price
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes
• If the tax paid to another jurisdiction is less than the RI tax, the purchaser pays the difference.
  
  
• Notes:
• Tax Rate: 6% of the sale price.
  
  
• Retailer's Use: If a retailer consumes property purchased for resale (other than for retention, demonstration, or display), use tax is due on the cost of the property.
  
  
• Military Exemption: Motor vehicles purchased by active duty armed forces members stationed outside RI are exempt from use tax if they paid equal or greater tax to another jurisdiction.
  
  
• Gifts/Prizes: Purchases of property intended to be gifted (advertising, samples, awards, prizes) are subject to sales/use tax.

South Carolina Use Tax

• Use Tax Base: Gross proceeds of sale
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes
  
  
• Notes:
• Gross Proceeds Definition: Includes proceeds of consignment sales.
  
  
• Withdrawal Valuation: For tangible personal property previously purchased at wholesale and withdrawn for personal/business use, the tax base is the fair market value.

South Dakota Use Tax

• Use Tax Base: Purchase price
• The use tax is due on the purchase price, specifically including freight and handling charges.
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes

Tennessee Use Tax

• Use Tax Base: Purchase price
• Levied on the purchase price of items used, consumed, distributed, or stored for use in the state (when not sold).
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes
• Allowed for sales/use tax legally paid in another state to prevent multi-state taxation.
  
  
• Credit is only allowable if the tax paid was properly imposed and may not exceed the amount of use tax due in Tennessee.

Texas Use Tax

• Use Tax Base: Purchase price
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes
  
  
• Note:
• Fixed Assets: Generally taxable. Specific callouts include motor vehicles brought back into the state, as well as boats or motors.

Utah Use Tax

• Use Tax Base: Purchase price
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes 

Vermont Use Tax

• Use Tax Base: Purchase price
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes
  
  
• Notes:
• Retail Items: Tax is on the purchase price.
  
  
• Self-Manufactured Items: For items you manufacture and use for business/personal use, the tax is on your "best customer" price (the price normally sold to best customers).
  
  
• Fabricated Items: Tax is on the amount paid for the property plus the fabrication labor or service charge.
  
  
• Fixed Assets: Exceptions apply per Vt. Stat. Ann. tit. 32, sec. 9741.

Virginia Use Tax

• Use Tax Base: Cost price
• Computed on the cost price of tangible personal property.
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes
  
  
• Note:
• 6-Month Rule: Tangible personal property brought into the state six months or more after its purchase is taxed on the current market value (but not in excess of the cost price).

Washington Use Tax

• Use Tax Base: Purchase price
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes
  
  
• Notes:
• Value Definition: Use tax is generally levied on the "value of the article used," which RCW 82.12.010 defines generally as the purchase price.
  
  
• Exceptions: There are specific situations where the value may be different than the amount of consideration paid.
  
  
• Promotional Items: Use tax applies to promotional material, free gifts, and samples.

West Virginia Use Tax

• Use Tax Base: Purchase price
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes
• A credit against the use tax is allowed for the amount of sales tax legally imposed by and paid to another state.
  
  
• Notes:
• Scope: Tax is imposed on the use of tangible personal property, custom software, or taxable services at a rate of 6%.
  
  
• Liability: A person's liability is not extinguished until the tax has been paid.
  
  
• Receipt Relief: A receipt with the tax separately stated, issued by a retailer (or authorized foreign retailer), relieves the purchaser from further liability.

Wisconsin Use Tax

• Use Tax Base: Purchase price
• Defined as the total cost of taxable goods purchased, including shipping and handling.
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes
  
  
• Notes:
• County/City Rule: Generally, if an item is purchased in a non-taxable county/city and brought into a taxable one, it is not subject to the local use tax.
  
  
• Construction Exception: Construction materials used to improve real property in a taxable county/city are subject to local tax, even if bought in a non-taxable one.
  
  
• Titled Items: Motor vehicles, boats, RVs, and aircraft are taxed based on where the item is customarily kept.
  
  
• Possession Rule: Snowmobiles, trailers, semi-trailers, and ATVs are taxed based on where the buyer receives possession.
  
  
• Nonresident Exemption: Motor vehicles, aircraft, and truck bodies purchased by nonresidents who strictly remove them from Wisconsin are exempt.

Wyoming Use Tax

• Use Tax Base: Purchase price
  
  
• Inventory Withdrawals: Taxable
  
  
• Fixed Assets: Taxable
  
  
• Credit Allowed: Yes
  
  

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FAQs

Do I owe use tax on purchases from other countries?

Yes. If you buy equipment or software from a vendor overseas and they do not charge you your state's sales tax, you still owe use tax when you use that item in your business.

Do I owe use tax on promotional items or free company swag?

If you buy branded t-shirts or pens tax-free to give away to customers, you owe use tax on them. Since you are giving the items away for free, the state considers you the end consumer.

Is there a minimum threshold for use tax?

For businesses, there is usually no minimum threshold. Technically, if you buy a $10 pack of folders tax-free, you owe the cents on that purchase. This is exactly why auditors find it so easy to catch mistakes.

How far back can an auditor look for unpaid use tax?

Usually, auditors look back three to four years. However, if you have never filed a use tax return or reported it on your sales tax return, the statute of limitations never actually starts. This means they can look back as far as they want.

Are there any exemptions for use tax?

Yes. The rule of thumb is that if an item is exempt from sales tax, it is also exempt from use tax. For example, if your state exempts certain manufacturing machinery from sales tax, you will not owe use tax on it either.

Why doesn't standard accounting software catch use tax?

Most standard accounting platforms only track the money coming in from your sales. They do not automatically analyze the bills you pay. Unless you manually flag a vendor invoice as needing use tax, the software will completely ignore it.

What should I do if I realize I owe years of unpaid use tax?

Do not panic, and do not just start filing old returns. You should look into a Voluntary Disclosure Agreement (VDA) with your state. A VDA allows you to come forward anonymously, pay what you owe for a limited number of years, and usually get the penalties waived.