SurpriseMVP
Mike
I am screwed. I just got this from my accountant:
USE TAX is paid by the purchaser (you) on taxable tangible goods when you don't pay SALES TAX at the time of purchase. A good example of this would be internet purchases. If you purchase goods from on online retailer, i.e. Amazon, and they do not charge you sales tax on the purchase, you (the purchaser) are now required to report the purchase, regardless of the amount, to AZDOR and pay the USE TAX at the rate of 6.6%. You could also be liable for USE TAX to AZDOR if you consumed/used the property in AZ and paid less than 6.6% in sales tax on the purchase. A good example of this would be while you were in Oregon on vacation you purchase a television and have it shipped home. Oregon has no sales tax, however, you are using the television in AZ you would owe USE TAX on the purchase.
WHAT ABOUT USE TAX TO THE CITY I LIVE IN?
When you pay sales tax to a local merchant you pay state and city tax. All businesses must be licensed and pay sales &/or use tax to the city they are located in. This requires the businesses to be registered with their city and pay an annual fee. We have not received guidance from any city as to how, or if, they will pursue USE TAX collection. While there is additional revenue to be generated it may be cost prohibitive. The AZDOR could collect for the cities on your AZ tax return but this would also put an additional administrative burden on them. As we receive further details we will keep you informed.
USE TAX is paid by the purchaser (you) on taxable tangible goods when you don't pay SALES TAX at the time of purchase. A good example of this would be internet purchases. If you purchase goods from on online retailer, i.e. Amazon, and they do not charge you sales tax on the purchase, you (the purchaser) are now required to report the purchase, regardless of the amount, to AZDOR and pay the USE TAX at the rate of 6.6%. You could also be liable for USE TAX to AZDOR if you consumed/used the property in AZ and paid less than 6.6% in sales tax on the purchase. A good example of this would be while you were in Oregon on vacation you purchase a television and have it shipped home. Oregon has no sales tax, however, you are using the television in AZ you would owe USE TAX on the purchase.
WHAT ABOUT USE TAX TO THE CITY I LIVE IN?
When you pay sales tax to a local merchant you pay state and city tax. All businesses must be licensed and pay sales &/or use tax to the city they are located in. This requires the businesses to be registered with their city and pay an annual fee. We have not received guidance from any city as to how, or if, they will pursue USE TAX collection. While there is additional revenue to be generated it may be cost prohibitive. The AZDOR could collect for the cities on your AZ tax return but this would also put an additional administrative burden on them. As we receive further details we will keep you informed.
