Use tax is tax that is withheld by the vendor. If the vendor does not charge taxes on taxable transactions or cannot charge for legal reasons, for example, the recipient of the goods is obliged to pay the taxes due to the tax authorities. This tax increases the expense, the offsetting entry is made to a tax provision account similar to an output tax account. See also Example: Posting Use Tax.

Use taxes are a special kind of taxation within the USA that arises from the fact that companies must withhold and remit tax only to those states in which they are registered. To those states in which they are not registered, vendors supply goods tax-free, even where the transaction would normally be liable to tax. The goods recipient is however required to pay use tax on the goods to their own state, and therefore obtains no tax advantage.

Some companies in the USA also have a global license, called a "Self-assessment Permit", that allows them to receive goods from vendors tax-exempt. These companies are then also responsible for correct payment of taxes on taxable transactions.

Use taxes must be both reported and paid to the tax authorities.