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Use Tax

Also called: consumer use tax

Definition: Use tax is the tax a buyer owes directly to the state on taxable items bought without sales tax being charged, such as many out-of-state or online purchases.

Updated November 9, 2026 · How we check facts

Use tax is the companion to sales tax. California's tax agency explains that it applies to the use, storage or other consumption in the state of the same kinds of items that are subject to sales tax, and that the buyer pays it separately when the seller did not collect the state's tax. Texas applies its state and local sales and use taxes at the same rate. Each state sets its own filing method and its treatment of tax already paid to another state.

Formula

use tax = taxable price × the state's use tax rate

Example

A $400 item arrives from an out-of-state seller with no tax charged. If the buyer's state rate is 6%, the use tax is 400 × 0.06 = $24.00.

The guide to calculating sales tax shows the same arithmetic for sales tax, and the percentage calculator handles it quickly.

Educational only, not tax advice; rules vary by state.

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Guides that explain it

How to Calculate Sales Tax (Formula, Reverse and Examples)

Related terms

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