---
title: The State-by-State Guide to Use Tax | TaxValet
description: Discover essential state-by-state use tax rules, how to calculate and report it, and learn how TaxValet can simplify your compliance.
---

[TaxValet | Sales Tax Blog | State laws, E-commerce, SaaS ](https://thetaxvalet.com/blog)

# [The State-by-State Guide to Use Tax | TaxValet](https://thetaxvalet.com/blog/state-by-state-guide-to-use-tax)

 Written by [Richard Reynolds](https://thetaxvalet.com/blog/author/richard-reynolds) | Apr 8, 2026 9:30:01 AM

Use tax is simply the state's way of balancing out sales tax. It covers standard business purchases where a vendor didn't collect sales tax upfront.

For example, you owe use tax if you buy tax-free laptops with a resale certificate but use one at your front desk.

We created this guide to show you the use tax rules by state, how to determine what you owe, and how to file use tax.

 

Jump to the state use tax section using this list:

- [Alabama](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=sales%20tax%20advice.-,Alabama%20Use%20Tax,-Tax%20Base%3A)
- [Alaska](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Alaska%20Use%20Tax,-Tax%20Base%3A)
- [Arizona](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Arizona%20Use%20Tax,-Tax%20Base%3A)
- [Arkansas](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Arkansas%20Use%20Tax,-Tax%20Base%3A)
- [California](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,California%20Use%20Tax,-Tax%20Base%3A)
- [Colorado](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Colorado%20Use%20Tax,-Tax%20Base%3A)
- [Connecticut](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Connecticut%20Use%20Tax,-Use%20Tax%20Base)
- [Delaware](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Delaware%20Use%20Tax,-No%20sales%20tax)
- [District of Columbia](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=District%20of%20Columbia%20Use%20Tax)
- [Florida](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Florida%20Use%20Tax,-Use%20Tax%20Base)
- [Georgia](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Georgia%20Use%20Tax,-Use%20Tax%20Base)
- [Hawaii](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Hawaii%20Use%20Tax,-Use%20Tax%20Base)
- [Idaho](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Idaho%20Use%20Tax,-Use%20Tax%20Base)
- [Illinois](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Illinois%20Use%20Tax,-Use%20Tax%20Base)
- [Indiana](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Indiana%20Use%20Tax,-Use%20Tax%20Base)
- [Iowa](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Iowa%20Use%20Tax,-Use%20Tax%20Base)
- [Kansas](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Kansas%20Use%20Tax,-Use%20Tax%20Base)
- [Kentucky](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Kentucky%20Use%20Tax,-Use%20Tax%20Base)
- [Louisiana](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Louisiana%20Use%20Tax,-Use%20Tax%20Base)
- [Maine](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Maine%20Use%20Tax,-Use%20Tax%20Base)
- [Maryland](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Maryland%20Use%20Tax,-Use%20Tax%20Base)
- [Massachusetts](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=Massachusetts%20Use%20Tax)
- [Michigan](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Michigan%20Use%20Tax,-Use%20Tax%20Base)
- [Minnesota](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Minnesota%20Use%20Tax,-Use%20Tax%20Base)
- [Mississippi](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Mississippi%20Use%20Tax,-Use%20Tax%20Base)
- [Missouri](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Missouri%20Use%20Tax,-Use%20Tax%20Base)
- [Montana](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Montana%20Use%20Tax,-No%20sales%20tax)
- [Nebraska](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Nebraska%20Use%20Tax,-Use%20Tax%20Base)
- [Nevada](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Nevada%20Use%20Tax,-Use%20Tax%20Base)
- [New Hampshire](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=New%20Hampshire%20Use%20Tax)
- [New Jersey](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,New%20Jersey%20Use%20Tax,-Use%20Tax%20Base)<https://docs.google.com/document/d/1n66CYy8gyRfAKk3Qg7GUGdjNxZFoc3x2zFeptq5bx68/edit?tab=t.9wqvryi3bwm2#heading=h.145sb0q63myq>
- [New Mexico](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,New%20Mexico%20Use%20Tax,-Use%20Tax%20Base)
- [New York](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,New%20York%20Use%20Tax,-Use%20Tax%20Base)
- [North Carolina](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,North%20Carolina%20Use%20Tax,-Use%20Tax%20Base)
- [North Dakota](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=North%20Dakota%20Use%20Tax)<https://docs.google.com/document/d/1n66CYy8gyRfAKk3Qg7GUGdjNxZFoc3x2zFeptq5bx68/edit?tab=t.9wqvryi3bwm2#heading=h.5uz82nqa1gi>
- [Ohio](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Ohio%20Use%20Tax,-Use%20Tax%20Base)
- [Oklahoma](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Oklahoma%20Use%20Tax,-Use%20Tax%20Base)
- [Oregon](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Oregon%20Use%20Tax,-No%20sales%20tax)
- [Pennsylvania](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Pennsylvania%20Use%20Tax,-Use%20Tax%20Base)
- [Rhode Island](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=Rhode%20Island%20Use%20Tax)
- [South Carolina](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=South%20Carolina%20Use%20Tax)
- [South Dakota](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=South%20Dakota%20Use%20Tax)
- [Tennessee](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Tennessee%20Use%20Tax,-Use%20Tax%20Base)
- [Texas](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Texas%20Use%20Tax,-Use%20Tax%20Base)
- [Utah](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Utah%20Use%20Tax,-Use%20Tax%20Base)
- [Vermont](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Vermont%20Use%20Tax,-Use%20Tax%20Base)
- [Virginia](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Virginia%20Use%20Tax,-Use%20Tax%20Base)
- [Washington](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Washington%20Use%20Tax,-Use%20Tax%20Base)
- [West Virginia](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,West%20Virginia%20Use%20Tax,-Use%20Tax%20Base)
- [Wisconsin](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Wisconsin%20Use%20Tax,-Use%20Tax%20Base)
- [Wyoming](https://thetaxvalet.com/blog/-temporary-slug-blog/blog-article-master-template-be27fec1-a34c-4e12-b387-d9b255a81a92?hs_preview=paowMJaW-210187254541#:~:text=a%20discovery%20call.-,Wyoming%20Use%20Tax,-Use%20Tax%20Base)

 

## When Do You Owe Use Tax?

You owe [use tax](https://thetaxvalet.com/blog/why-use-tax-is-in-the-spotlight-and-how-to-stay-compliant) whenever you store, use, or consume a taxable item in your state, but no sales tax was collected at the time of purchase.

You generally encounter use tax in three distinct scenarios:

1. **Out-of-state purchases:** Vendors without a physical or economic presence (nexus) in your state may not collect sales tax. You must report and pay the tax on these items yourself.
2. **Inventory withdrawals:** You buy stock for resale (which you bought tax-free with a [resale certificate](https://thetaxvalet.com/blog/how-to-get-a-resale-certificate-in-each-state)) but then consume that product. Since you "used" it instead of "selling" it, you now owe the state use tax on that item.
3. **Buying from states with no sales tax:** You drive across the border to a [state with no sales tax](https://thetaxvalet.com/blog/states-with-no-sales-tax) to buy equipment for your business and use it in your home state, where there is sales tax.

 

## How to Calculate Use Tax

Your use tax rate matches your local sales tax rate.

The formula works like this:

- (Purchase Price + Shipping/Handling) X Your Local Sales Tax Rate = Use Tax Owed

Many states often tax shipping and delivery charges. So, if you paid $1,000 for a desk and $50 for shipping, your taxable base is $1,050.

<https://thetaxvalet.com/hs-fs/hubfs/How%20to%20Calculate%20Use%20Tax%20(3).png?width=1131&height=647&name=How%20to%20Calculate%20Use%20Tax%20(3).png>

 💡Click to view full image 

If you already paid sales tax to another state at the time of purchase* (but at a lower rate than your home state's*), you usually only owe the difference.

 

## How to Report Use Tax

How you report use tax depends entirely on the state. While it is common to report use tax directly on your regular monthly or quarterly sales tax return, this isn't a universal rule. Some states (like Colorado, for example) require you to file a completely separate return just for use tax.

With that in mind these are the two most common ways to file:

1. **Sales tax return:** If you currently file a sales tax return, you typically add your use tax to a designated line item, such as "Taxable Purchases." 
     - **The Math:** Total Due = (Tax Collected from Customers) + (Use Tax You Owe).
2. **Separate return:** If you don't make taxable sales, some states require a separate Consumer Use Tax return. 
     - **The Math:** Total Due = (Use Tax You Owe).

## How to Manage Use Tax

Filing in the form is simple, but the record-keeping behind it requires a lot of attention to detail.

Consider a standard month for a growing business:

- You give away 50 t-shirts at a local conference.
- You use specialized 3D printer filaments for a demo.
- You buy an office chair from an out-of-state vendor who charges zero sales tax.

To accurately calculate that one line on your tax return, the best practice is to track every single promo t-shirt, filament roll, and tax-free invoice.

While tracking these items is often still required, how hands-on you need to be depends entirely on your systems and sales channels. It requires a lot of attention to detail, but you don't have to figure out the workflow alone.

 

## State-by-State Use Tax Rules

*Tax laws change like the weather. That’s why we please ask you to consider this a high-level reference guide to help you understand use tax obligations by state, not a formal legal defense or a substitute for professional sales tax advice.*

 

### Alabama Use Tax

- **Tax Base:** [Sales price](https://www.revenue.alabama.gov/wp-content/uploads/2022/08/Sales_Use_Rulebook.pdf) (unless a specific contractor rule applies)
- **Inventory Withdrawals:** [Taxable](https://www.revenue.alabama.gov/wp-content/uploads/2022/08/Sales_Use_Rulebook.pdf)
- **Fixed Assets:** [Taxable](https://www.revenue.alabama.gov/wp-content/uploads/2022/08/Sales_Use_Rulebook.pdf)

- **Credit Allowed:** [Yes](https://www.revenue.alabama.gov/wp-content/uploads/2022/08/Sales_Use_Rulebook.pdf) 
    - The total credit allowed cannot exceed the taxes due the state of Alabama or its subdivisions.

- - - **Notes:** 
                  - **Contractor Benefits: **In contract performance situations, the base is the **lesser** of the sales price or fair market value at the time the property is put into use.
                  - **Trade-ins: **For vehicle trade-ins, the base is the net difference (new vehicle price minus trade-in value).

 

 

### Alaska Use Tax

- **Tax Base:** [Purchase price](https://www.commerce.alaska.gov/web/dcra/OfficeoftheStateAssessor/AlaskaSalesTaxInformation.aspx?) (Local level only)
- **Inventory Withdrawals:** Taxable (varies by borough)
- **Fixed Assets:** Taxable (varies by borough)
- **Credit Allowed:** Yes
- **Notes:**

 

 

### Arizona Use Tax

- **Tax Base:** [Sales price](https://www.azleg.gov/ars/42/05155.htm#:~:text=percentage%20of%20the-,sales%20price,-.%20A%20manufactured%20building)
- **Inventory Withdrawals:** [Taxable](https://www.azleg.gov/ars/42/05155.htm)
- **Fixed Assets:** Taxable
- **Credit Allowed: **[Yes](https://www.azleg.gov/ars/42/05155.htm)
- **Notes:**

 

 

### Arkansas Use Tax

- **Tax Base:** [Sales price](https://www.dfa.arkansas.gov/wp-content/uploads/et2008_3.pdf)
- **Inventory Withdrawals:** [Taxable](https://law.justia.com/codes/arkansas/2014/title-26/subtitle-5/chapter-52/subchapter-3/section-26-52-322)
- **Fixed Assets:** [Taxable](https://law.justia.com/codes/arkansas/title-26/subtitle-5/chapter-53/subchapter-1/section-26-53-149)
- **Credit Allowed:** [Yes](https://www.dfa.arkansas.gov/wp-content/uploads/et2008_3.pdf)
- **Notes:**

 

 

### California Use Tax

- **Tax Base:** [Purchase price](https://cdtfa.ca.gov/formspubs/pub110/#:~:text=on%20an%20item%27s-,purchase%20price,-and%20generally%20applies)
- **Inventory Withdrawals:** [Taxable](https://cdtfa.ca.gov/lawguides/vol2/suta/570-0440.html)
- **Fixed Assets:** [Taxable](https://cdtfa.ca.gov/formspubs/pub52.pdf)
- **Credit Allowed:** [Yes](https://cdtfa.ca.gov/formspubs/pub110/guidelines.htm#:~:text=and%20pay%20tax.-,You%20may%20be%20able%20to%20take%20a%20credit%20if%20you%20paid%20another%20state%27s%20sales%20or%20use%20tax,-\(see%20instructions%20on)
- **Notes:**

 

 

### Colorado Use Tax

- **Tax Base:** [Full purchase price](https://tax.colorado.gov/consumer-use-tax-guide#:~:text=calculated%20on%20the-,full%20purchase%20price,-of%20the%20taxable). Includes all material, labor, service, and profit charged to the user.
- **Inventory Withdrawals:** Taxable
- **Fixed Assets:** Taxable
- **Credit Allowed:** [Yes](https://tax.colorado.gov/consumer-use-tax-guide#:~:text=allowed%20a%20credit%20for%20any%20legally%20imposed%20sales%20or%20use%20taxes%20the%20purchaser%20paid%20in%20another%20state%20for%20the%20same%20property)
- **Notes:**

 

 

### Connecticut Use Tax

- **Use Tax Base:** [Sales price](https://www.cga.ct.gov/2019/pub/chap_219.htm#sec_12-411)
- **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
- **Notes:**

 

 

 

### Delaware Use Tax

[No sales tax, so use tax.](https://revenue.delaware.gov/frequently-asked-questions/gross-receipts-tax-faqs/?)

While there is no general use tax, Delaware imposes a use tax on **rental transactions** (lessors of tangible personal property) at a rate of **1.9914%**. 

 

 

 

### District of Columbia Use Tax

- **Use Tax Base:** [Sales price](https://code.dccouncil.gov/us/dc/council/code/sections/47-2202?)
- **Inventory Withdrawals:** [Taxable](https://code.dccouncil.gov/us/dc/council/code/sections/47-2202?utm_source=chatgpt.com)
- **Fixed Assets: [Taxable  
  ](https://otr.cfo.dc.gov/sites/default/files/dc/sites/otr/publication/attachments/2017_FR-800M_Booklet.pdf)**
- **Credit Allowed:** Yes
- **Notes:**

 

 

 

### Florida Use Tax

- **Use Tax Base:** [Cost price](https://floridarevenue.com/Forms_library/current/guides/gt300015.pdf)
- **Inventory Withdrawals:** [Taxable](https://floridarevenue.com/taxes/taxesfees/Pages/sales_tax.aspx)
- **Fixed Assets:** Taxable
- **Credit Allowed:** [Yes](https://floridarevenue.com/Forms_library/current/guides/gt300015.pdf)
- **Notes:**

 

 

 

### Georgia Use Tax

- **Use Tax Base:** Cost price
- **Inventory Withdrawals:** [Taxable](https://rules.sos.ga.gov/gac/560-12-1-.14)
- **Fixed Assets:** Taxable
- **Credit Allowed:** [Yes](https://rules.sos.ga.gov/gac/560-12-1?#:~:text=1%2D.31%20Repealed-,Rule%20560%2D12%2D1%2D.32%20Taxes%20Paid%20to%20Other%20States,-(1)) 
    - 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](https://files.hawaii.gov/tax/legal/brochures/Use_brochure-23.pdf) (or landed value)
- **Inventory Withdrawals:** [Taxable](https://files.hawaii.gov/tax/legal/taxfacts/tf95-1.pdf). (Note: Explicit rules are absent; treated as taxable to be conservative).
- **Fixed Assets:** Taxable
- **Credit Allowed:** [Yes](https://files.hawaii.gov/tax/legal/brochures/Use_brochure-23.pdf)
- **Note:**

 

 

### Idaho Use Tax

- **Use Tax Base:** Purchase price
- **Inventory Withdrawals:** Taxable
- **Fixed Assets:** Taxable
- **Credit Allowed:** [Yes](https://tax.idaho.gov/taxes/sales-use/use-tax/credit/)
- ****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](https://tax.illinois.gov/localgovernments/usetax.html#:~:text=Illinois%20businesses%20withdraw%20tangible%20personal%20property%20from%20their%20sales%20inventories%20for%20their%20own%20use.%20In%20this%20instance%2C%20at%20the%20time%20the%20item%20was%20purchased%2C%20the%20business%20did%20not%20pay%20tax%20to%20the%20vendor%20because%20it%20purchased%20the%20item%20for%20resale%20purposes.)
- **Fixed Assets:** Taxable
- **Credit Allowed:** [Yes](https://tax.illinois.gov/individuals/faqs-use-tax.html#:~:text=Can%20I%20get,Illinois%20the%20difference.)
- **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](https://law.justia.com/codes/indiana/title-6/article-2-5/chapter-3/section-6-2-5-3-3/)
- **Inventory Withdrawals:** Taxable. Refers to liability for tax following non-exempt use after an exemption certificate was issued.
- **Fixed Assets:** Taxable
- **Credit Allowed:** [Yes](https://www.in.gov/dor/i-am-a/business-corp/business-faq/#What_if_I_ve_paid_sales_tax_to_another_state_)
- **Note:**

 

 

### Iowa Use Tax

- **Use Tax Base:** [Purchase price](https://www.legis.iowa.gov/docs/code/423.2.pdf?)
- **Inventory Withdrawals:** Taxable
- **Fixed Assets:** [Taxable](https://revenue.iowa.gov/taxes/tax-guidance/sales-use-excise-tax/sales-use-tax-guide#:~:text=Examples%20of%20Purchases%20Subject%20to%20Use%20Tax)
- **Credit Allowed:** [Yes](https://revenue.iowa.gov/taxes/tax-guidance/sales-use-excise-tax/sales-use-tax-guide#:~:text=If%20possession%20of,has%20been%20paid.) 

 

 

 

### Kansas Use Tax

- **Use Tax Base:** [Purchase price](https://ksrevisor.gov/statutes/chapters/ch79/079_037_0003.html?#:~:text=collected%20in%20an-,amount%20equal%20to%20the%20consideration%20paid,-by%20the%20taxpayer)
- **Inventory Withdrawals:** Taxable
- **Fixed Assets:** Taxable
- **Credit Allowed:** Yes

 

 

### Kentucky Use Tax

- **Use Tax Base:** [Sales price](https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=53490)
- **Inventory Withdrawals:** [Taxable](https://revenue.ky.gov/DOR%20Training%20Materials/Sales%20Tax%20Facts%202013%20-%20Dec.pdf)
- **Fixed Assets:** [Taxable](https://revenue.ky.gov/Individual/Consumer-Use-Tax/Pages/default.aspx)
- **Credit Allowed:** [Yes](https://revenue.ky.gov/Individual/Consumer-Use-Tax/pages/default.aspx#:~:text=Credit%20Against%20the,use%20tax%20due.)
- **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](https://www.lasc.org/opinions/96c0716.pfc.pdf?)
- **Inventory Withdrawals:** [Taxable](https://revenue.louisiana.gov/tax-education-and-faqs/faqs/louisiana-resale-certificate/what-does-purchase-for-use-or-consumption-are-still-taxable-mean/#:~:text=If%20no%20state%20sales%20tax%20was%20paid%20at%20the%20time%20of%20purchase%2C%20sales/use%20tax%20is%20due%20on%20the%20value%20of%20the%20item%20withdrawn%20from%20resale%20inventory.)
- **Fixed Assets:** Taxable
- **Credit Allowed:** Yes
- **Note:**

 

 

 

### Maine Use Tax

- **Use Tax Base:** [Purchase price](https://www.maine.gov/revenue/sites/maine.gov.revenue/files/inline-files/MaineUseTaxOctober2013.pdf)
- **Inventory Withdrawals:** Taxable
- **Fixed Assets:** Taxable
- **Credit Allowed:** Yes

 

 

### Maryland Use Tax

- **Use Tax Base:** [Purchase price](https://law.justia.com/codes/maryland/2005/gtg/11-301.html?)
- **Inventory Withdrawals:** [Taxable](https://www.marylandcomptroller.gov/content/dam/mdcomp/tax/legal-publications/tips/business/bustip3.pdf) (Treated as taxable in the absence of explicit rules).
- **Fixed Assets:** Taxable
- **Credit Allowed:** [Yes](https://www.marylandcomptroller.gov/content/dam/mdcomp/tax/legal-publications/tips/business/bustip3.pdf)
- **Notes:**

 

 

 

### Massachusetts Use Tax

- **Use Tax Base:** [Sales price ](https://malegislature.gov/Laws/GeneralLaws/PartI/TitleIX/Chapter64I/Section2)
- **Inventory Withdrawals:** [Taxable](https://malegislature.gov/Laws/GeneralLaws/PartI/TitleIX/Chapter64I/Section8)
- **Fixed Assets:** [Taxable](https://www.mass.gov/guides/sales-and-use-tax#-motor-vehicles-&-trailers-:~:text=and%20paper%20goods-,Motor%20Vehicles%20%26%20Trailers,-For%20motor%20vehicle)
- **Credit Allowed:** [Depends](https://www.mass.gov/guides/sales-and-use-tax#-introduction-:~:text=Generally%2C%20anyone%20who,agreement%20with%20Massachusetts.)

 

 

 

### Michigan Use Tax

- **Use Tax Base:** Cost price
- **Inventory Withdrawals:** [Taxable](https://www.michigan.gov/taxes/business-taxes/sales-use-tax/information/general-faq#:~:text=However%2C%20credit%20is%20given%20for%20any%20sales%20or%20use%20tax%20that%20is%20legally%20due%20and%20paid%20in%20another%20state%20at%20the%20time%20of%20purchase.)
- **Fixed Assets:** [Taxable](https://www.michigan.gov/taxes/business-taxes/sales-use-tax/use-tax-1#:~:text=Use%20tax%20is%20also%20due%20on%20vehicles%2C%20off%2Droad%2Dvehicles%2C%20mobile/manufactured%20homes%2C%20aircraft%2C%20snowmobiles%2C%20and%20watercraft%20purchased%20or%20transferred%20by%20an%20individual%20or%20business%20from%20anyone%20who%20is%20not%20a%20licensed%20dealer%20or%20a%20retailer.)
- **Credit Allowed:** [Yes](https://www.michigan.gov/taxes/business-taxes/sales-use-tax/information/general-faq#:~:text=However%2C%20credit%20is%20given%20for%20any%20sales%20or%20use%20tax%20that%20is%20legally%20due%20and%20paid%20in%20another%20state%20at%20the%20time%20of%20purchase.) 

 

 

 

### Minnesota Use Tax

- **Use Tax Base:** [Purchase price](https://www.revenue.state.mn.us/sites/default/files/2023-01/FS146.pdf)
- **Inventory Withdrawals:** [Taxable](https://www.revenue.state.mn.us/sites/default/files/2023-01/FS146.pdf)
- **Fixed Assets:** [Taxable](https://www.revenue.state.mn.us/sites/default/files/2023-01/FS146.pdf)
- **Credit Allowed:** [Yes](https://www.revenue.state.mn.us/sites/default/files/2023-01/FS146.pdf)

 

 

 

### Mississippi Use Tax

- **Use Tax Base:** Purchase price
- **Inventory Withdrawals:** Taxable
- **Fixed Assets:** Taxable
- **Credit Allowed:** Yes
- **Notes:**

 

 

 

 

 

### Missouri Use Tax

- **Use Tax Base:** [Purchase price](https://dor.mo.gov/taxation/individual/tax-types/consumers-use.html)
- **Inventory Withdrawals:** Taxable
- **Fixed Assets:** Taxable
- **Credit Allowed:** [Yes](https://revisor.mo.gov/main/OneSection.aspx?section=144.615&bid=7444&hl=) 

 

 

 

### Montana Use Tax

No sales tax, no use tax.

- **Notes:**

 

 

 

### Nebraska Use Tax

- **Use Tax Base:** [Sales price](https://revenue.nebraska.gov/about/chapter-1-sales-and-use-tax#:~:text=002.07%20Calculating%20Use,complete%20the%20sale.)
- **Inventory Withdrawals:** [Taxable](https://revenue.nebraska.gov/sites/default/files/doc/legal/regs/1-036.pdf)
- **Fixed Assets:** [Taxable](https://revenue.nebraska.gov/about/chapter-1-sales-and-use-tax#:~:text=002.02B%20If%20sales,to%20Another%20State\))
- **Credit Allowed:** [Yes](https://revenue.nebraska.gov/about/chapter-1-sales-and-use-tax#:~:text=002.02B%20If%20sales,to%20Another%20State\)) 

 

 

 

### Nevada Use Tax

- **Use Tax Base:** Sales price
- **Inventory Withdrawals:** Taxable
- **Fixed Assets:** Taxable
- **Credit Allowed:** [Yes](https://tax.nv.gov/faqs/consumer-use-tax-faqs/)
- **Notes:**

 

 

 

### New Hampshire Use Tax

No sales tax, no use tax.

- **Notes:**

 

 

 

### New Jersey Use Tax

- **Use Tax Base:** [Purchase price](https://www.nj.gov/treasury/taxation/su_10.shtml)
- **Inventory Withdrawals:** Taxable
- **Fixed Assets:** [Taxable](https://www.nj.gov/treasury/taxation/documents/pdf/guides/New-Jersey-Consumer-Automotive-Tax-Guide.pdf)
- **Credit Allowed:** [Yes](https://www.nj.gov/treasury/taxation/pdf/pubs/sales/anj7.pdf)
- **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](https://www.tax.newmexico.gov/governments/wp-content/uploads/sites/7/2021/04/FYI-230.pdf)
- **Inventory Withdrawals:** [Taxable](https://www.tax.newmexico.gov/businesses/wp-content/uploads/sites/4/2021/12/FYI-230.pdf)
- **Fixed Assets:** [Taxable](https://www.tax.newmexico.gov/businesses/wp-content/uploads/sites/4/2021/12/FYI-230.pdf)
- **Credit Allowed: [Yes](https://www.tax.newmexico.gov/businesses/wp-content/uploads/sites/4/2021/12/FYI-230.pdf)**
- **Notes:**

 

 

 

### New York Use Tax

- **Use Tax Base:** [Purchase price](https://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/st/use_tax_for_businesses.htm?utm_source=chatgpt.com#:~:text=due%20on%20the-,consideration%20given%20or%20contracted,-to%20be%20given)
- **Inventory Withdrawals:** Exempt / Taxable (See Notes)
- **Fixed Assets:** [Taxable](https://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/st/manufacturing_equipment.htm)
- **Credit Allowed:** [Depends](https://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/st/reciprocity.htm#:~:text=A%20reciprocal%20credit%20is%20not%20automatically%20allowed%20just%20because%20some%20amount%20of%20money%20labeled%20as%20tax%20was%20paid%20to%20another%20state.%20The%20amount%20paid%20must%20meet%20the%20criteria%20outlined%20above%20in%20order%20to%20qualify%20for%20the%20New%20York%20State%20or%20local%20reciprocal%20use%20tax%20credit.)
- **Notes:**

 

 

 

### North Carolina Use Tax

- **Use Tax Base:** Purchase price
- **Inventory Withdrawals:** Taxable
- **Fixed Assets:** Taxable
- **Credit Allowed:** Yes
- **Note:**

 

 

### 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](https://codes.ohio.gov/ohio-revised-code/section-5741.01)
- **Inventory Withdrawals:** Taxable
- **Fixed Assets:** [Taxable](https://codes.ohio.gov/ohio-administrative-code/rule-5703-9-21)
- **Credit Allowed:** [Yes](http://oh.elaws.us/orc/5741.02)
- **Notes:**

 

 

### Oklahoma Use Tax

- **Use Tax Base:** [Purchase price](https://law.justia.com/codes/oklahoma/title-68/section-68-1402/?)
- **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:**

 

 

### Oregon Use Tax

No sales tax, no use tax.

- **Notes:**

 

 

 

### Pennsylvania Use Tax

- **Use Tax Base:** [Purchase price](https://codes.findlaw.com/pa/title-72-ps-taxation-and-fiscal-affairs/pa-st-sect-72-7202/?)
- **Inventory Withdrawals:** [Taxable](https://www.pa.gov/agencies/revenue/resources/tax-types-and-information/sales-use-and-hotel-occupancy-tax/use-tax/use-tax-for-businesses.html)
- **Fixed Assets:** [Taxable](https://www.pa.gov/content/dam/copapwp-pagov/en/revenue/documents/formsandpublications/formsforbusinesses/sut/documents/rev-717.pdf)
- **Credit Allowed:** [Yes](https://www.pa.gov/content/dam/copapwp-pagov/en/revenue/documents/formsandpublications/formsforbusinesses/sut/documents/rev-935.pdf)

 

 

 

### Rhode Island Use Tax

- **Use Tax Base:** [Purchase price](https://law.justia.com/codes/rhode-island/title-44/chapter-44-18/section-44-18-20/)
- **Inventory Withdrawals:** Taxable
- **Fixed Assets:** Taxable
- **Credit Allowed:** Yes
- **Notes:**

 

 

 

### South Carolina Use Tax

- **Use Tax Base:** [Gross proceeds of sale](https://dor.sc.gov/resources-site/lawandpolicy/Documents/SC%20Sales%20Tax%20Manual.pdf)
- **Inventory Withdrawals:** Taxable
- **Fixed Assets:** Taxable
- **Credit Allowed:** Yes
- **Notes:**

 

 

 

### South Dakota Use Tax

- **Use Tax Base:** [Purchase price](https://dor.sd.gov/media/1gxpk4ck/2024-7_sales-use-tax-guide.pdf)
- **Inventory Withdrawals:** [Taxable](https://dor.sd.gov/media/1gxpk4ck/2024-7_sales-use-tax-guide.pdf)
- **Fixed Assets:** [Taxable](https://dor.sd.gov/media/1gxpk4ck/2024-7_sales-use-tax-guide.pdf)
- **Credit Allowed:** [Yes](https://dor.sd.gov/media/s1epx5qw/use-tax-individual.pdf)

 

 

 

### Tennessee Use Tax

- **Use Tax Base:** [Purchase price](https://law.justia.com/codes/tennessee/title-67/chapter-6/part-2/section-67-6-203/?)
- **Inventory Withdrawals:** Taxable
- **Fixed Assets:** [Taxable](https://www.tn.gov/content/dam/tn/revenue/documents/tax_manuals/june-2025/Sales-Use-Tax-Manual.pdf)
- **Credit Allowed:** [Yes](https://www.tn.gov/content/dam/tn/revenue/documents/tax_manuals/june-2025/Sales-Use-Tax-Manual.pdf)

 

 

 

### Texas Use Tax

- **Use Tax Base:** [Purchase price](https://www.law.cornell.edu/regulations/texas/34-Tex-Admin-Code-SS-3-346#:~:text=total%20purchase%20price)
- **Inventory Withdrawals:** [Taxable](https://comptroller.texas.gov/help/sales-tax/taxable-purchases.php?category=programs#:~:text=items%20taken%20out%20of%20inventory%20for%20use%2C%20items%20given%20away%2C%20and%20items%20purchased%20for%20an%20exempt%20use%20but%20actually%20used%20in%20a%20taxable%20manner)
- **Fixed Assets:** [Taxable](https://comptroller.texas.gov/help/sales-tax/taxable-purchases.php?category=programs)
- **Credit Allowed:** [Yes](https://www.law.cornell.edu/regulations/texas/34-Tex-Admin-Code-SS-3-338)
- **Note:**

 

 

 

### Utah Use Tax

- **Use Tax Base:** Purchase price
- **Inventory Withdrawals:** [Taxable](https://www.utah.gov/pmn/files/471783.pdf)
- **Fixed Assets:** Taxable
- **Credit Allowed:** Yes 

 

 

 

### Vermont Use Tax

- **Use Tax Base:** [Purchase price](https://tax.vermont.gov/sites/tax/files/documents/FS-1018.pdf)
- **Inventory Withdrawals:** [Taxable](https://d2l2jhoszs7d12.cloudfront.net/state/Vermont/Vermont%20Department%20of%20Taxes/httptax.vermont.gov/Sales%20%26%20Use%2C%20Meals%20%26%20Rooms%2C%20Withholding%2C%20and%20Miscellaneous%20Taxes/SUT-451-Instr.pdf)
- **Fixed Assets:** Taxable
- **Credit Allowed:** Yes
- **Notes:**

 

 

 

### Virginia Use Tax

- **Use Tax Base:** [Cost price](https://law.lis.virginia.gov/admincode/title23/agency10/chapter210/section6030/)
- **Inventory Withdrawals:** [Taxable](https://law.lis.virginia.gov/admincode/title23/agency10/chapter210/section490/)
- **Fixed Assets:** [Taxable](https://law.lis.virginia.gov/admincode/title23/agency10/chapter210/section490/)
- **Credit Allowed:** [Yes](https://law.lis.virginia.gov/admincode/title23/agency10/chapter210/section450/)
- **Note:**

 

 

 

### Washington Use Tax

- **Use Tax Base:** [Purchase price](https://app.leg.wa.gov/WAC/default.aspx?cite=458-20-178#:~:text=Credit%20for%20taxes,Use%20Tax%20Laws.)
- **Inventory Withdrawals:** Taxable
- **Fixed Assets:** [Taxable](https://dor.wa.gov/taxes-rates/use-tax)
- **Credit Allowed:** [Yes](https://app.leg.wa.gov/WAC/default.aspx?cite=458-20-178#:~:text=Credit%20for%20taxes,Use%20Tax%20Laws.)
- **Notes:**

 

 

 

### West Virginia Use Tax

- **Use Tax Base:** [Purchase price](https://code.wvlegislature.gov/11-15A-1/)
- **Inventory Withdrawals:** [Taxable](https://tax.wv.gov/Documents/TSD/tsd369.pdf)
- **Fixed Assets:** [Taxable](https://tax.wv.gov/Documents/TSD/tsd369.pdf)
- **Credit Allowed:** [Yes](https://tax.wv.gov/Documents/TSD/tsd100.pdf)
- **Notes:**

 

 

 

### Wisconsin Use Tax

- **Use Tax Base:** [Purchase price](https://www.revenue.wi.gov/Pages/FAQS/ise-usetax.aspx#use10)
- **Inventory Withdrawals:** [Taxable](https://www.revenue.wi.gov/Dor%20Publications/2104usetax.pdf)
- **Fixed Assets:** [Taxable](https://www.revenue.wi.gov/Dor%20Publications/2104usetax.pdf)
- **Credit Allowed:** [Yes](https://www.revenue.wi.gov/Pages/FAQS/ise-usetax.aspx#:~:text=owe%20use%20tax.-,What%20if%20I%20already%20paid%20tax%20in%20another%20state%3F,taxes%20and%20customs%20duty%20charges%20are%20not%20eligible%20for%20this%20credit.,-What%20is%20taxable)
- **Notes:**

 

 

 

### Wyoming Use Tax

- **Use Tax Base:** [Purchase price](https://wyoleg.gov/statutes/compress/title39.pdf)
- **Inventory Withdrawals:** Taxable
- **Fixed Assets:** Taxable
- **Credit Allowed:** Yes

 

 

 

## Get Support With Your Sales Tax and Use Tax

At TaxValet, we believe you should focus on your business, not on auditing your own t-shirt giveaways. We integrate your use tax reporting into your normal monthly sales tax filings.

With us as your partner, you never have to worry about sales tax or use tax again. We cover you end-to-end.

Ready to offload your compliance to an expert team? [Book a no-obligation discovery call](https://thetaxvalet.com/get-started-free/).

 

 

## 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.

 

 

[View full post](https://thetaxvalet.com/blog/state-by-state-guide-to-use-tax)

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