Common scenario: you buy parts online from out of state without paying sales tax, then use them on a job in your state — you owe use tax on those parts. Reported with your sales tax filing.
Short definition. A tax owed on items bought tax-free and used in a state that would normally tax them.
Category. Use tax is a tax term used by service businesses when billing customers.
How Glo Invoice handles it. Glo Invoice builds use tax into the invoice itself, so you don't track it on paper or in a spreadsheet.
Frequently asked questions
What does use tax mean?
Common scenario: you buy parts online from out of state without paying sales tax, then use them on a job in your state — you owe use tax on those parts. Reported with your sales tax filing.
Related terms
Sales tax — A tax on the sale of goods (and sometimes services) collected from the customer at checkout.
Tax nexus — A connection to a state that obligates you to collect that state's sales tax.
