Buyers may be entitled to a credit against their state and local use taxes for sales taxes legally paid to other jurisdictions on the same items. Reciprocity most often occurs when items are purchased in one state for immediate use in another state, thereby creating a taxable event in both states. When allowed, the credit prevents double taxation and generally results in an overall effective tax rate of the higher of the sales or use tax rates of the states involved in the transaction.

Besides knowing the reciprocity laws of both of the states, special care must be given to whether credit can be taken for local sales taxes paid or against local use taxes due. We have analyzed these issues for many of our clients and are ready to help you take full advantage of this credit.

Feel free to call or e-mail us to discuss any tax issues you may have.

,