What is the primary purpose of a use tax?

The primary purpose of a use tax is to ensure that items purchased from out-of-state vendors and subsequently used within the state are appropriately taxed. This type of tax is designed to complement sales tax, which is typically imposed on purchases made within the state. Use taxes help to level the playing field between in-state and out-of-state sellers, thereby discouraging consumers from shopping in other states solely to avoid paying sales tax.

When individuals or businesses acquire tangible personal property outside their home state and then bring it back for use, a use tax applies. This tax ensures that local governments do not lose revenue that would have been collected if the purchase had been made from a local retailer, thereby maintaining equity among local businesses and protecting state tax revenues.

The other options address different aspects of taxation or regulation. Levying charges for government services relates to fees rather than taxes and does not focus on purchases. Imposing sales tax on local purchases refers to the taxation on goods bought within the state, which does not encompass out-of-state transactions. Regulating property ownership refers to land-use regulations and property taxes, differing entirely from the concept of use tax, which is about personal property acquired elsewhere.