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Before I describe real estate clients and sales tax that applies to them, let’s familiarize ourselves with terms. One cannot talk about “sales” tax without also talking about “use” tax. These are different taxes, but they complement each other.

Generally, sales tax is imposed on sales of all tangible personal property as well as certain enumerated services. If sales tax was not charged at the point of sale at the same rate as the consumer’s state of residence, then the consumer will owe use tax to the state in which the item is used. Consequently, the sale of tangible personal property is presumptively taxable, while services must be specifically enumerated in order to be taxable.

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