Navigating Sales Tax vs Use Tax: Understanding the Key Differences for Businesses

• Sales tax and use tax are both forms of indirect taxation
• Sales tax is applied at the point of retail sale to the final consumer
• Sales tax rate varies by location and type of product
• Taxable items include tangible personal property, services, and digital products
• Seller or retailer collects and remits sales tax to the government
• Over 13,000 sales tax jurisdictions in the US make compliance difficult
• Sales tax on digital products depends on type, state of sale, seller’s location, and buyer’s location
• Economic nexus complicates sales tax compliance by triggering tax obligations based on business activities in a state

Source: complyt.io

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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