Do I Owe New York Use Tax?

If you purchased taxable items or services for use in New York and didn't pay the correct amount of New York sales tax at the time of purchase, you may owe New York use tax.

Pathway:
New York State Return > Sales or Use Tax > Enter your applicable Use Tax

Use tax often applies to purchases made online, through catalogs, or from out-of-state sellers when sales tax wasn't charged or wasn't charged at the correct rate.

What Is Use Tax?

Use tax is a tax imposed on taxable purchases when:

• No New York sales tax was collected, or
• Less than the proper amount of sales tax was paid

New York requires use tax to be paid on taxable property and services that are used, stored, or consumed within the state.

When Do I Owe Use Tax?

You may owe use tax if you:

• Purchased items online and no New York sales tax was charged
• Purchased items through a mail-order catalog
• Bought taxable items from an out-of-state seller
• Purchased taxable services without paying New York sales tax
• Paid sales tax at a lower rate than required where the property is ultimately used

Common Examples of Use Tax

Use tax may apply to:

• Internet purchases
• Mail-order purchases
• Out-of-state purchases
• Furniture
• Appliances
• Electronics
• Taxable clothing and accessories
• Taxable services used in New York

Example

Suppose you buy a television from an out-of-state retailer that doesn't collect New York sales tax. If the television is brought into New York and used there, you may owe use tax on that purchase.

Additional Local Use Tax

You may also owe additional local use tax if:

• You purchased property while living in one New York locality
• Sales tax was paid at that locality's rate
• The property is later used in a different locality with a higher tax rate

In that situation, you may owe the difference between the tax originally paid and the higher local tax rate.

How Do I Calculate Use Tax?

Enter the amount of use tax owed in the Use Tax section of your New York return.

Your use tax may be based on:

• The purchase price of taxable items
• The applicable New York State and local tax rates
• Any sales tax already paid

Review purchases made throughout the year to determine whether additional tax is due.

New York Estimated Use Tax Table

If you didn't keep records of all taxable purchases made during the year, New York allows many taxpayers to use an estimated use tax amount based on income.

Estimated Use Tax Table

*This may be any amount up to $15,000, including $0 or a negative amount.

Part-Year New York Residents

If you maintained a permanent place of abode in New York for only part of the year, multiply the applicable amount from the table by the number of months you maintained the abode and divide by 12.

Any period of more than one-half month counts as a full month.

When Should I Use the Estimated Table?

The estimated table may be appropriate when:

• You don't have complete records of all taxable purchases
• Your purchases were typical personal purchases
• You aren't reporting large purchases separately

This method provides a simplified way to calculate use tax when detailed records aren't available.

Large Purchases Require Actual Calculations

The estimated use tax table does not replace the requirement to report use tax due on substantial purchases.

Examples include:

• Motor vehicles
• Boats
• Snowmobiles
• Aircraft
• Expensive furniture
• Major electronics purchases
• Other high-value taxable property

Use tax on these purchases should generally be calculated using the actual purchase price.

What Information Will I Need?

You may need:

• Purchase receipts
• Invoices
• Online order confirmations
• Records showing sales tax paid
• Documentation showing where the property was purchased and where it was used

Keep these records with your tax documents in case additional verification is needed later.

What Happens If I Don't Pay Use Tax?

Failure to report and pay use tax may result in:

• Additional tax assessments
• Interest charges
• Penalties

New York may verify purchases through information received from vendors, other states, and other third-party sources.

How Does Use Tax Affect My Return?

Use tax entered on your return may:

• Increase your New York tax liability
• Reduce your refund
• Increase the amount you owe with your return

Because use tax is included in your overall tax calculation, even a relatively small amount can affect your final refund or balance due.

Important Information

• Use tax is separate from income tax.
• You may owe use tax even if no sales tax was charged when you made the purchase.
• Online and out-of-state purchases are common sources of use tax liability.
• Additional local use tax may be due when property is used in a locality with a higher tax rate than where sales tax was originally paid.
• The estimated use tax table may be used when detailed purchase records aren't available.
• Keep receipts and supporting purchase records with your tax documents.

Additional Information

Before completing the Use Tax section, review purchases made during the year to determine whether New York sales tax was paid. If taxable goods or services were purchased for use in New York without paying the proper amount of sales tax, the related use tax should be reported on your New York return. If detailed records aren't available, the estimated use tax table may provide a simple alternative for calculating the amount to enter.