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Understanding Sales Tax vs Use Tax - Snap Supply

Understanding Sales Tax vs Use Tax

Like anything government related sales tax can be a very complex and confusing subject. You may have an understanding of what Sales Tax is, but what the heck is consumer use tax?

What Is Sales Tax?

To summarize plain and simple, sales tax is collected by the seller at the time of purchase and paid by the consumer. The seller now remits the sales tax to the appropriate jurisdictions. This sales tax generally goes towards state programs like education, health, and infrastructure.

What Is Use Tax?

Use tax is imposed when a transaction takes place that are subject to sales tax, but no tax was collected or paid. In this case, the seller passes the burden onto the consumer, who is now required, by law, to remit the appropriate amount of use tax based on local jurisdiction and state laws.

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