Effective Use Tax Rate Agreements

We work with our client and state governments to implement an effective use tax rate agreement. Depending on the state, the agreement generally allows a taxpayer to develop one rate for remitting use tax on purchases, which substantially simplifies how use tax is remitted. Businesses that implement an effective use tax rate typically no longer need to analyze each purchase transaction to determine taxability, but instead multiply monthly purchases by the effective rate and pay tax based on that rate. Not all states allow effective use tax rates and only certain taxpayers can qualify.