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I thought with use taxes you owed the remaining difference in tax. Say I purchase a $100 widget in Kenosha, WI with a sales tax of 5.5%, and I live in MI with a
by RightMillennial 8y ago
I thought with use taxes you owed the remaining difference in tax. Say I purchase a $100 widget in Kenosha, WI with a sales tax of 5.5%, and I live in MI with a sales and use tax of 6%. I would owe MI the 0.5% difference on the $100 which would be $0.50.
- xienze 8y agoNo my understanding is that the state wants their full X% -- the whole point of the use tax is "you paid that guy but you're supposed to pay me." If you paid a higher tax rate in another state do you think your home state would be happy with 0% or even reimburse you the difference? IIRC you're expected to get the out of state retailer to reimburse you at a later time and then when you're paying your income taxes you include any purchases subject to use tax.
- ghaff 8y agoIt probably depends on the state. In Massachusetts, oddly, if you paid less than the Mass sales tax rate of 6.25%, you owe 6.25% use tax. It's not the delta you owe, it's the full amount. But you don't owe it at all if you paid more than the Mass rate.
- RightMillennial 8y agoI think it depends on the state. At least in MI, you only have to pay the difference [1] [2]: > Use Tax on the Difference > If you paid at least 6 percent to another state on your purchase, you do not owe use tax to Michigan. If you paid less than 6 percent, you owe the difference. > NOTE: The full 6 percent use tax is also owed on purchases made in a foreign country. [1]: https://www.taxslayer.com/support/1153/michigan-use-tax https://www.taxslayer.com/support/1153/michigan-use-tax [2]: https://www.michigan.gov/documents/taxes/MI_1040_Instruction_Book_Instructions_Only_609092_7.pdf#page=8 https://www.michigan.gov/documents/taxes/MI_1040_Instruction...