Use Tax: State Revenue Totals
Even though most states administer a use tax to supplement sales tax collections, few report it on their returns.
A recent report estimates only about 1.6 percent of taxpayers report use tax on their income returns. Collection rates and methods vary by state, shown in the map below.
When consumers do not pay sales tax on Internet transactions or purchases made in other jurisdictions, they are liable for use taxes at the state sales tax rate plus any applicable local taxes. Internet retailers are not required to collect tax unless they maintain a physical presence in a state and states have little means of enforcement.
A University of Tennessee study estimates state and local governments nationwide will lose at least $11.4 billion in potential use tax revenues from e-commerce sales for tax year 2012.
-- Uncollected use tax estimates for electronic sales and non-electronic business-to-consumer sales: University of Tennessee report (methodology begins on page 15)
-- Uncollected estimates for non-electronic business-to-business transactions: Streamlined Sales Tax Governing Board
-- Use tax collections from 2009 income returns: Minnesota state House report
||Have use tax; list income return line item|
||Have use tax; no reporting line|
||Have use tax; no income tax|
||No sales tax|