Updated June 17, 2026
Figure out what you'd owe
If no sales tax was collected at checkout, this estimates the use tax at your local combined rate instead.
Use tax applies when you make a purchase without paying sales tax at the point of sale and then use or store the item in a state that has a sales tax. The rate is the same as the local sales tax rate. The purpose is to prevent buyers from gaining a tax advantage by purchasing out of state or from a seller who does not collect.
The most common scenarios
- Online purchases from out-of-state sellers. Before the 2018 South Dakota v. Wayfair ruling, many online retailers did not collect sales tax outside their home state. When no tax was collected, the buyer technically owed use tax.
- Purchases in a no-tax state. If you live in California and drive to Oregon to buy electronics, you owe California use tax when you bring those items back.
- Business purchases of taxable goods. Companies that acquire equipment or supplies without paying tax, for example by misapplying a resale certificate, may owe use tax when those goods are consumed internally rather than resold.
Businesses face more exposure
For businesses, use tax compliance comes up regularly in audits. Common triggers include equipment purchases, software licenses, and supplies where no tax was charged at point of sale. Tracking tax-exempt purchases and assessing use tax owed is standard business tax practice.
How the Wayfair ruling changed things
In 2018, the Supreme Court allowed states to require online retailers to collect sales tax without a physical presence. Most large online sellers now collect at checkout. That reduces use tax situations for consumers but does not eliminate them. Smaller online sellers and private transactions may still not collect.
How to pay use tax
Most states let individuals report use tax on their annual income tax return through a line item or a separate form. Businesses report it on their regular sales and use tax return. The rate is whatever sales tax would have been on the same purchase in your jurisdiction.
Figure out what you'd owe
If no sales tax was collected at checkout, this estimates the use tax at your local combined rate instead.