Question

advantages and disadvantages of a Use tax (Seller Use Tax)

Answer 1

Use tax is the tax liability on consumers by the state who are purchasing goods from some other states not having sale tax obligation to sellers.

Advantages:

Contribution by everyone: A small purchaser also can take part in economic reform by paying at least a small amount of tax, because such tax is indirect in nature.

Surety: Since consumers pay taxes by their own, it ensures them that the tax is paid; there is no chance of misleading them by charging more at the time of purchase.

Disadvantages:

Regressive structure: The tax rate is flat for any volume of consumption. A small consumption also pays the same tax as a big consumption, which makes regressive form; this thing is not fair for small consumers.

Complication: The tax rate may vary from state to state, which creates complication of making calculation; regular updating by consumers may not be possible always.