One of my clients, Jack, called me this morning from Europe, where he is living and working temporarily. Jack bought some cool stuff in Italy and had it shipped to his house back here in Pennsylvania.

Jack was a little steamed, as he properly paid the U.S. Customs duty, but then he received a large bill for "Use Tax". I explained that this is the sister to the sale tax (it's called PA Sales & Use Tax). It's a tax on the consumption or use of personal property in Pennsylvania. Jack has to pay 6% of the value of the cool Italian stuff to PA.

If you buy something outside of PA that could, if sold in PA, be subject to 6% sales tax, then you owe 6% "use" tax for the privilege of using it in PA.

I've seen small businesses hit with this tax many times, including audits of specific business types (doctors, dentists, etc.) to determine what they purchased outside of PA, typically internet purchases.

With individuals, enforcement is rare, but the law still applies.

© 2016 Kevin F. Danyi, JD, LLM
(These little posts I write are for educational purposes only and are not legal advice. I have to write that even though we're all pretty smart and already knew that.)