Use Tax is a type of tax imposed on the purchase of goods or services that are used, stored, or consumed within a state, but were not subject to sales tax at the time of purchase. This often applies to items bought online or from out-of-state vendors. The purpose of use tax is to ensure that local businesses are not disadvantaged by consumers purchasing items from outside the state without paying tax. Individuals and businesses are responsible for reporting and paying Use Tax on these purchases. The tax rate typically matches the local sales tax rate, and failure to pay can result in penalties. Many states provide forms and guidelines to help taxpayers comply with these regulations.