Skip to main content
Avalara Help Center

What is the difference between sales tax and sales and sellers use?

Overview

You want to know what the difference is between sales and sellers use tax and what the nexus settings for those mean.

Environment

Avalara AvaTax

Resolution

  • Sales tax is typically required when you have physical presence.
  • If you select Sales Tax as your nexus setting you'll only collect Sales tax, never use tax in that State. Sales tax rates exist almost everywhere, at every jurisdiction level.
  • When you are collecting as a convenience to your customer you typically collect a sales and sellers use tax. This nexus setting will collect Sales Tax on IntraState (Origin is within the State) sales, but Use Tax on InterState (Origin is out of State) Sales.
  • Use tax rates exist for every state where there is state level sales tax, but other jurisdictions (County, City, Special) may not have a Use Tax rate.

Next steps

For more information, watch Sales vs. Seller's Use tax vs. Consumers Use Tax.