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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 or economic requirement.
  • If you select sales tax as your Tax Type setting you'll only collect sales tax, and 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 Tax Type setting will collect Sales Tax on intrastate sales,  (origin and destination is within the state), but Sellers Use Tax on interstate sales (origin and destination are not in the same state).
  • Sellers 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.