Do you owe Use Tax?

We all know about sales tax. It is a tax paid whenever we purchase something. The tax is some percentage of the purchase price. Did you know there is another tax called use tax? Use tax applies whenever you buy, lease, or rent items without paying sales taxes. The tax is based on the price, and the rate is the same as the sales tax rate.

Did you make Internet purchases or buy something from an out-of-state mail order vendor? You may owe use tax. According to Minnesota Revenue:

  • The majority of businesses have a use tax liability.
  • The most frequent assessments made in audits involve unreported use tax.

The fact sheets below from Minnesota Revenue provide more information.

 

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