1. Sales Tax Defined Sales Tax
Imposed on the retail sale of tangible personalty or services within the taxing jurisdiction

2. Use Tax Defined
Use Tax
Imposed on the possession, use, storage, or consumption of tangible personal or services within the taxing jurisdiction

3. Use Tax Illustration Doris O’Brien Resident of State A
Purchases $ 30,000 of goods
Pays $ 1,200 sales tax (*)
$ 30,000
X 6.5%
$ 1,950
(1,200)
$ net tax due

4. Sales and Use Tax Nexus
Vendor's physical presence in state is required
(Quill decision) and is established if the
vendor:
Maintains a place of business for selling or storing property in-state.
Uses employees or independent contractors for selling or delivering goods in-state.

5. Sales Tax Burden Wealthy taxpayer illustration:
Income (net of income taxes) of $ 200,000;
50% Investment or $ 100,000; Consumption
$ 100,000 including $ 6,000 sales tax
Middle income taxpayer illustration:
Income (net of income taxes) of $ 50,000
Consumption $ 50,000 including $ 3,000 sales tax

6. Excluded Goods or Transactions
Sales for resale
Ingredient or component parts Industrial or agricultural machinery or equipment
Property used or consumed in manufacturing
Containers and packaging
Occasional sales

7. Tax-exempt Purchasers
Federal government and agencies
State and local governments and agencies
(public hospitals, state schools, etc.
Not for profits

8. Areas of Current Interest
Definition of Specific Exemptions
Taxation of Services
Sales Tax Audits (Tyco)
Taxation of e-Commerce
Streamlined Sales Tax Project
Alternative Approaches to Sales/Income Tax
Sales/Use Tax on Capital Changes
Competition with No Sales Tax States—NH,DE,MT,OR
Tax Amnesty, Holiday Programs

9. Payroll Taxes State Withholding Arrangements Unemployment Compensation
Audit Issues

10. Property Taxes Ad valorem base Personal Property Taxes Intangibles
Autos and Similar Vehicles
Accounts Receivable, Inventory, Machinery and Equipment
Intangibles
Real Property Taxes
Assessment & Collection Procedures

11. Other Taxes Incorporation Tax License Tax (Occupations & Professions)
Realty Transfer Tax
Mortgage Recording Tax
Capital Stock Tax
Franchise Tax