Accounting Articles > Illinois Sales and Use Tax Audit:

What is use tax?

Use tax is imposed on any transaction which would be subject to regular sales tax, only the physical goods were delivered to an address inside the State of Illinois from another state. You are charged for the use of the product inside the state, because your out of state vendor did not charge their state's sales tax on the transaction.

Use tax can be quite a surprise in many situations. Let's say that you live in Chicago and purchase a bunch of equipment from a vendor in Milwaukee. If the equipment is delivered to your Illinois address, you will not be required to Wisconsin Sales Tax. If you don't pay use tax on the transaction in Illinois and are audited, you will have a problem. You will be subject to the original tax which was due, plus additional interest, and penalty.

Currently the Use Tax Rate in The State of Illinois is 6.2%.

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