Tax on out-of-state purchases applies to groceries

CHATTANOOGA, Tenn. (AP) -- Tennessee revenue officials say residents who make purchases in other states rarely pay Tennessee's inconspicuous use tax, which also applies to purchases of groceries.

Tennessee Revenue Commissioner Reagan Farr says Tennessee has had the use tax on the books for a long time and it is largely ignored. He said the department's focus is not on grocery purchases across the state's borders but those taxes are supposed to be paid.

Residents who buy goods out of state are required to pay the difference between the tax rates of Tennessee and the other state.

Farr says the use tax is a corollary to the sales tax and applies to purchases of all goods. He says it was put in place "to make sure our in-state retailers were on the same level playing field as out-of-state retailers."

(Copyright 2008 by The Associated Press. All Rights Reserved.)

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