What best describes the nature of sales tax and use tax?

The nature of sales tax and use tax is such that they are designed to target different aspects of a transaction but are not mutually exclusive. The sales tax is imposed on the sale of goods and services at the point of purchase, while the use tax applies to the use, storage, or consumption of goods that were purchased without sales tax, often from out-of-state vendors. Both taxes ensure that similar activities do not escape taxation altogether.

In many jurisdictions, if a good is purchased without paying sales tax, the buyer is expected to report that purchase and pay use tax on it, ensuring that both taxes can relate to the same transaction in terms of tax liability. Therefore, these taxes can interact, but they cannot be considered mutually exclusive when examining a single transaction. Understanding the purpose and functionality of both taxes is essential to navigate the tax landscape effectively.