What should Sales or use tax must be paid on?

Sales or use tax must be paid on tangible personal property sold at retail, as well as certain services and digital goods, depending on state law. This includes items like clothing, electronics, and furniture. Additionally, use tax applies to goods purchased out-of-state for use in the state where the buyer resides, ensuring that local businesses are not disadvantaged by out-of-state purchases. Exemptions may apply for certain categories, such as food or prescription drugs.