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    State Sales And Use Taxes

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    Jared wants to give his wife a $30,000 diamond necklace for her birthday. To avoid the state and local general sales tax of 8.5%, he asks his aunt (who lives in New Hampshire) to make the purchase. Has Jared saved $2,550 (8.5%  $30,000)?

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    Solution Preview

    Jared has probably not saved any tax, if he is found out. Most states with a sales tax also have a complementary use tax. (The sales tax is an excise tax on a retailer for making retail sales, while a use tax is an excise tax on a person or ...

    Solution Summary

    This solution explains the purpose of a state use tax and its relationship to a state sales tax.