What type of tax applies to purchases made from out-of-state vendors that do not collect sales tax?

The correct answer, which is Use Tax, applies to purchases made from out-of-state vendors that do not collect sales tax. This type of tax is designed to ensure that consumers pay taxes on items purchased for use within their state when no sales tax has been collected by the vendor. Specifically, when individuals or businesses buy goods from sellers who are not located in their state (and therefore do not charge state sales tax), the use tax must be self-reported and paid by the purchaser to their state tax authority.

This tax is crucial for maintaining fairness in taxation between local retailers, who are required to collect sales tax, and out-of-state vendors. It helps prevent tax avoidance by ensuring that all purchases are subject to tax, whether made in-state or out-of-state. Thus, use tax serves a vital role in state tax systems, supporting public services and infrastructure.