What is the Use Tax and when am I supposed to pay it? Help pls!

I'm super confused about this whole "Use Tax" thing on my state tax return. It asks if I purchased any out-of-state untaxed goods and says I would owe Use Tax if I did. But what exactly counts for this??? A few specific questions I have: 1. If I bought a textbook online for my classes, would that count? Especially since textbooks are tax exempt in my state anyway? 2. What about when I buy stuff from vending machines around campus? The machines are in-state, but I think the company that owns them might be based elsewhere. 3. Does Use Tax only matter if I buy stuff from states without sales tax (like Oregon or New Hampshire)? Sorry for all the questions - I'm trying to file my taxes myself for the first time and this is giving me a headache! My parents always handled this stuff before.

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18 comments

Lara Woods

•8M

Use Tax is basically a way for your state to collect tax on purchases you made outside the state when no sales tax was collected. Think of it as a complement to sales tax. To answer your specific questions: 1. For textbooks, it depends. If textbooks are exempt from sales tax in your state, they would typically also be exempt from use tax. The exemption is usually about the product itself, not where you bought it. 2. Vending machine purchases made in your state wouldn't typically trigger use tax, even if the company is based elsewhere. What matters is where the transaction physically took place. 3. Use tax isn't limited to purchases from tax-free states like Oregon or New Hampshire. It applies to any purchase where appropriate sales tax wasn't collected. This can include online purchases, catalog orders, or purchases made while traveling out of state. The most common use tax situations these days are online purchases where the seller didn't collect your state's sales tax. Before 2018, this was very common, but now many online retailers collect state sales tax automatically.

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Lara Woods

•8M

Yes, technically you do owe use tax on those purchases where tax wasn't collected. While it would be legally correct to track every single purchase, many states now include a "safe harbor" estimate on their tax forms. This is based on your income and provides an estimated amount you can pay without detailed records. Most people don't track every single purchase. For significant items (like furniture, electronics, jewelry), it's good practice to keep records and pay the use tax. For smaller everyday purchases, the safe harbor provision is designed to make compliance easier.

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Molly Chambers

•8M

I was confused about Use Tax too until I found this amazing tool at https://taxr.ai that helped me understand exactly what I needed to report. It analyzed all my Amazon and other online purchases, flagged the ones where no sales tax was collected, and calculated exactly what I owed. Saved me hours of going through credit card statements trying to figure it out! The tool even explained which purchases were exempt in my state, so I didn't overpay. For someone like you asking about specific categories like textbooks, it would tell you exactly which ones count based on your state's rules.

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Molly Chambers

•8M

It works with every state that has a use tax requirement. I've used it for filing in both New York and California with no problems, and I know people who've used it in at least a dozen other states. The process is really simple - you can either link your accounts (Amazon, major credit cards, etc.) or upload statements. It automatically identifies purchases where tax wasn't collected and compares them to your state's specific exemption rules. For example, it would flag that textbooks are exempt in some states but not others. You can also manually add purchases the system might miss.

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Eli Butler

•8M

Coming back to say I was totally wrong about taxr.ai being difficult to use. I tried it after my last comment and was shocked at how simple it was - took maybe 15 minutes to connect my accounts and it found about $43 in use tax I owed on stuff I bought last year. Most was from small online shops I'd completely forgotten about! The best part was it automatically applied my state's exemptions so I didn't pay tax on stuff that's already exempt. Would have taken me hours to figure that out manually. Wish I'd known about this for the last few years!

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Marcus Patterson

•8M

If you think understanding Use Tax is frustrating, try getting someone at your state tax office to explain it to you! I spent THREE HOURS on hold trying to get clarification about exactly what I needed to report. Finally gave up and tried https://claimyr.com which got me through to someone at the tax office in about 20 minutes. Check out how it works: https://youtu.be/_kiP6q8DX5c The tax agent explained that my state has a minimum threshold ($100 in purchases) before you even need to worry about Use Tax, which nobody had told me before! Saved me from unnecessarily reporting a bunch of small purchases.

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Marcus Patterson

•8M

It's not a scam at all - they use a system that navigates the phone trees and waits on hold for you. When they reach a human, they call you and connect you directly. It's basically like having someone wait on hold in your place. The reason it works is they have technology that deals with the hold times and phone systems. I was skeptical too, but when my phone rang and I was suddenly talking to an actual tax department employee, I was amazed. They don't answer your tax questions themselves - they just get you through to the actual government employees who can.

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Mateo Warren

•8M

I'm eating my words right now. After dismissing Claimyr in my comment yesterday, I was still desperate to get an answer about a specific use tax situation (bought a custom item from an artist in another state), so I tried it. Within 30 minutes I was talking to a real person at my state tax office! The agent I spoke with explained that in my case, I did owe use tax on the artwork because it wasn't exempt and no sales tax was collected. But she also walked me through how to report it correctly on my state form. Honestly worth it just to stop stressing about doing it wrong.

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Sofia Price

•8M

FYI - here's a simple breakdown of what usually counts for Use Tax: - Online purchases where no sales tax was collected - Items bought in other states with lower or no sales tax - Purchases from overseas vendors - Items bought directly from individual sellers who don't collect tax What usually DOESN'T count: - Items bought in your own state (that's sales tax) - Items that are tax exempt in your state (if textbooks are exempt from sales tax, they're usually exempt from use tax too) - Digital downloads (in some states) - Services (in states where services aren't taxed

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Sofia Price

•8M

That's exactly what use tax is designed for! If you buy clothes in Oregon (no sales tax) and bring them back to California, technically you owe California use tax on those items. This is one of the most common situations where use tax applies, but also one of the hardest for states to enforce. Generally speaking, if you bought something significant (like expensive electronics, jewelry, furniture, etc.) while out of state and didn't pay sales tax, you should report it on your state return and pay the use tax.

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