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Use Tax Is a Substitute for Sales Tax. All States That Have A

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Use Tax Is a Substitute for Sales Tax. All States That Have A What is Use Tax? How does a business report use tax? Why do some out-of-state companies Use Tax is a substitute for sales tax. All states If you are registered to collect and report sales charge tax? that have a sales tax also impose a use tax. Use tax, the sales tax return contains a line to report Some out-of-state companies charge sales tax taxes are imposed primarily to minimize unfair taxable purchases. If you do not sell goods, you because they have a presence or relationship in competition between sales made in-state and must register with the Maine Revenue Services Maine that requires them to register, collect and those made out-of-state. The use tax rate is the to report use tax only. remit sales tax. Others voluntarily register. Use same as the sales tax rate. tax does not apply if your vendor charges you a How does an individual report use tax? Maine sales tax. When does use tax apply? For purchases of single items that cost $5,000 or Use tax applies when sales tax has not been less, individuals have 2 options to report use tax: What if I paid tax to another state? charged. A purchase made out-of-state is the If you made purchases in a state which charges most common type of transaction subject to use A. You may choose to report any use tax sales tax and your purchase was taxed, you may tax. For instance, if you purchased goods from a due on your 1040 ME, Maine personal not owe any use tax in Maine. If the amount of vendor located in Massachusetts, whether by income tax return, at the end of the tax tax was equal to or more than Maine’s rate, no mail order or by taking delivery in year. There is a line on the 1040 ME tax is due. However if you paid less than Massachusetts, use tax applies if the goods are form on which you can list the use tax Maine’s rate you owe the difference. brought to Maine for use here. A Maine resident due. If you choose this method of or business does not escape sales tax by reporting and you do not know the exact Is there use tax when I purchase purchasing out-of-state. amount of your taxable purchases you used goods from an individual? have the option of using a calculated Sales by a person who is not in the business of Another situation where use tax applies is when a formula that is outlined in the 1040 ME selling goods are casual sales and generally not business withdraws goods from inventory for its instructional booklet. This formula may taxable. However, certain casual sales are own use. Use tax, in this case, is due at the time only be used for purchases of individual specifically taxed by law. The most common are of withdrawal. items costing less than $1,000. camper trailers, cars, trucks, snowmobiles, ATV’s, and boats. When you buy one of these In either situation, use tax is based on the B. The second option is to file an Individual items, you will be required to pay use tax or purchase price of the item. Use Tax return directly with Maine show proof that tax was paid when you register Revenue Services by the 15th of the the vehicle. Common taxable items are office supplies and month following the month of your equipment, cameras, clothing, computer purchase. Is there use tax when I purchase hardware, software and supplies, janitorial goods over the internet? supplies, fax machines and supplies, Note: For purchases of single items that cost Yes. Purchases over the internet are treated the photocopiers and supplies, CDs, DVDs, more than $5,000, individuals are required by same way as purchases made out-of-state. If the electronic games and books. law to file an Individual Use Tax return directly vendor is not registered with Maine and does not with Maine Revenue Services by the 15th of the charge Maine sales tax, then you would be liable Are there any exemptions month following the month of your purchase. for the use tax. from use tax? Many of the exemptions that apply to sales tax Where can I get an Individual Use Tax also apply to use tax. Common exempt goods return? are grocery staples and goods purchased for Individual Use Tax returns are available on our resale. website at: www.maine.gov/revenue. Need more information? MAINE REVENUE 207-624-9693 SERVICES Maine Revenue Services Sales, Fuel & Special Tax Div P.O. Box 1065 Augusta, Maine 04332-1065 www.maine.gov/revenue MAINE USE TAX 207-287-6628 Look inside for answers The information in this bulletin addresses to commonly asked questions some of the more common questions Additional copies of this pamphlet are regarding use tax. It is not meant to cover all available from Maine Revenue Services situations. Specific information can be obtained by contacting Maine Revenue Services. (Published under Appropriation 010371) Revised July 2013 .
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