for all those who question the legitimacy or even the existence of “Use Tax” at least in the state of NY, here is some info. This is from TurboTax. If you went to state.ny.us/finance the info is there as well. Those who do their own taxes are familiar with this question. those who dont, and were not asked by their tax preparer, well, thats up to your preparer to answer.
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Information on paying sales and use taxes on your income tax return
When do you owe New York State and local sales or use tax?
When you make a purchase of taxable property or services from a seller (vendor) located in New York State and take delivery in New York State, the vendor should collect state and local sales or use tax due and forward it to the Tax Department. However, you are responsible for paying the tax directly to the Tax Department under the following three circumstances:
Deliveries into New York State – You owe state and local sales or use tax if you:
* purchase property or a service that is delivered to you in New York State without payment of New York State and local tax to the seller, such as through the Internet, by catalog, from television shopping channels, or on an Indian reservation.
Purchases outside New York State with subsequent use in New York State – You may also owe state and local sales or use tax if you are a resident of New York State at the time you purchase any of the following outside New York State:
* property you bring into New York State for use in New York State;
* a service performed on property outside New York State, and you bring that property into New York State for use here; or
* a service (such as an information service) you bring into New York State for use here.
(You may be entitled to a credit for sales or use tax paid to another state. See the Instructions for Form ST-140 for more information.)
However, you are not required to pay state or local sales or use tax on any property or service that you bring into New York State which you purchased outside of the state before you became a resident of New York State.
Additional local tax – You may owe an additional local tax if you are a resident of a locality (county or city) at the time of purchase and you:
* bring property into that locality which you purchased in another locality in New York State that has a lower tax rate;
* bring property into that locality on which you had a taxable service performed in another locality in New York State that has a lower tax rate; or
* bring a service (such as an information service) into that locality which you purchased in another locality in New York State that has a lower tax rate.
However, you are not required to pay any additional local tax on any property or service that you bring into a locality in New York State that you purchased outside that locality before you became a resident of that locality.
Note: For purposes of these sales and use tax instructions, the word tax will be used to refer to either the sales tax or the use tax, or both.
Who is a New York State resident for sales and use tax purposes?
For sales and use tax purposes, the definition of resident includes persons who may not be considered residents for personal income tax purposes. For example, persons maintaining a permanent place of abode in New York who do not spend more than 183 days a year in the state, college students, and military personnel may all be residents for sales and use tax purposes even if they are not residents for income tax purposes. For sales and use tax purposes, an individual is a resident of the state and of any locality in which he or she maintains a permanent place of abode. A permanent place of abode is a dwelling place maintained by a person, or by another for that person to use, whether or not owned by such person, on other than a temporary or transient basis. The dwelling may be a home, apartment or flat; a room including a room at a hotel, motel, boarding house, or club; a room at a residence hall operated by an educational, charitable, or other institution; housing provided by the armed forces of the United States, whether the housing is located on or off a military base or reservation; or a trailer, mobile home, houseboat, or any other premises. This includes second homes. Therefore, you can be a resident of more than one locality and state for sales and use tax purposes.
An individual doing business in New York State is a resident for sales and use tax purposes of the state and of any county or city in which the individual is doing business, with respect to purchases of taxable property or services used in the business. Therefore, if an individual is engaged in business in New York State but has no permanent place of abode in New York State, the individual will owe use tax only on taxable purchases made with respect to the business operated in New York.
What tangible personal property and services are subject to sales and use taxes?
Most tangible personal property is subject to tax. Some examples are: cigarettes and other tobacco products; alcohol; candy; clothing and footware costing $110 or more per article; books; electronic equipment; furniture; collectibles (stamps, coins, etc., bought for collections); works of art; off-the-shelf computer software; and, generally, a garage sale item costing more than $600.
Some examples of tax exempt items are: prescription and nonprescription drugs and medicines used for humans; certain medical equipment and supplies used for humans; newspapers; periodicals; most food items; U.S. and New York State flags; Indian arts and crafts when purchased on an Indian reservation; used mobile homes; and college textbooks. Clothing and footware costing less than $110 per article as exempt from State tax but may still be subject to local taxes depending on the locality involved.
Only certain services are subject to tax. Taxable services include maintaining, servicing, and repairing tangible personal property (for example, auto and appliance repair) and real property such as land and buildings (for example, services such as house repairs, lawn maintenance, and interior decorating). Some examples of exempt services are dry cleaning, veterinary (except for grooming and boarding), legal, accounting, and medical services.
For more information on taxable and exempt goods and services, see Publication 750, A Guide to Sales Tax in New York State.
Reporting and paying sales and use taxes
You must report any unpaid sales or use tax owed for 2008 on your 2008 personal income tax return.
Note: Do not use Form IT-150 or Form IT-201 to report and pay sales and use taxes with respect to a business if you or the business is registered, or are required to be registered, for sales tax purposes. Report and pay sales and use taxes with respect to business purchases on the applicable sales and use tax return.
If you are requesting an extension of time to file your personal income tax return and you owe sales or use tax, you must pay any sales or use tax you owe at the time you request the extension. See Form IT-370 for more information.
If you receive an automatic extension of time to pay your New York State personal income tax (for example, you are in a foreign country), your sales or use tax is due when your New York State personal income tax is due.
You may report and pay your sales or use tax liability on your personal income tax return for:
* your personal purchases;
* purchases related to your royalty activities or rental real estate activities reported in Part I of federal Schedule E; and
* purchases related to your Schedule C, C-EZ, or F business (not otherwise eligible for exemption) unless the business is, or is required to be, registered for sales tax purposes.
If you are married and file a joint return, you may include your spouse’s sales or use tax liability for:
* your spouse’s purchases;
* purchases related to your spouse’s royalty activities or rental real estate activities reported in Part I of federal Schedule E; and
* purchases related to your spouse’s Schedule C, C-EZ, or F business (not otherwise eligible for exemption) unless the business is, or is required to be, registered for sales tax purposes.
If you are not filing an income tax return but owe sales or use tax for 2008, you must pay any unpaid sales or use tax by filing Form ST-140, Individual Purchaser’s Annual Report of Sales and Use Tax, by April 15, 2009. However, if you or the business is registered or required to be registered for sales tax purposes, all sales and use taxes owed with respect to business purchases must be reported and paid with the periodic sales and use tax return.
At the time of registration, the New York State Department of Motor Vehicles (DMV) collects any unpaid sales or use tax on a motor vehicle, trailer, all-terrain vehicle, vessel, or snowmobile that must be registered or titled by DMV. Therefore, do not report or pay the sales or use tax on these items on your personal income tax return.
What happens if I don’t pay the sales or use tax due?
Failure to pay sales or use tax may result in the imposition of penalty and interest. The Tax Department conducts both routine and special audits to promote compliance. In addition, the U.S. Customs Service provides the department with information from customs declarations filed by New York State residents returning from overseas travel. The Tax Department also obtains information on sales to New York State residents under information exchange agreements with other states.
Computing sales or use tax
To compute the amount of tax you owe, see the Instructions for Form ST-140.
If you do not owe any sales or use tax, you must enter 0 on the sales or use tax line of your personal income tax return.
For more information, see Publication 774, Purchaser’s Obligations to Pay Sales and Use Taxes Directly to the Tax Department, Questions and Answers.