Now I'm really confused. I still think this is just another way to get around the impact of I-695. I bought a '61 Corvette from my friend. Use tax is the tax collected on a purchase of a vehicle from a private party. It is collected by the state Department of Licensing, county auditors and their subagents, as well as the state Department of Revenue.
Sales tax is placed on the initial retail sale of a vehicle.
For instance, when you purchase a new or used vehicle from a car dealership, you pay sales tax on the purchase price and pay the tax directly to the dealer. I'm still confused . Because sales tax and use tax are assessed at the same rate, they are easily confused. Sales tax is applied to a purchase from a registered business, e.g., from a car dealership or car sales lot. An easy way to remember the difference between the two types of taxes is if you didn't pay sales tax on the purchase of the vehicle, then use tax is due.