When is Use Tax or Sales Tax Collected

When is Use Tax or Sales Tax Collected

Any individual, business, corporation, or other entity is liable for use tax, when sales tax is not collected by the seller and the item is delivered in the same state of registration/incorporation. For example, registering in South Dakota a seller will either collect sales tax or use tax for an item sold within the state but may offset the collection of sales tax for exports to other states with a sales tax license.

That said, some states provide an exception for out-of-state, online businesses that only sell through a registered marketplace facilitator. Further, some states such as Alaska, New Hampshire, Delaware, Montana, Oregon, Wyoming, Nevada, Texas, Washington, Florida, Tennessee do not have sales or use taxes.
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