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2) Q: What is the purpose of section 5-a? A: The statutes aim is to ensure that contractors do not get state work unless they, their affiliates and their subcontractors are, when required by section 5-a, registered to collect New York State and local sales and compensating use taxes.
Compensating tax (Section 7-9-7 NMSA 1978) is an excise tax imposed on persons using tangible property, services, licenses or franchises in New Mexico.
Consumer use tax (sometimes referred to as a compensating use tax) is complementary to the sales tax. It is a type of excise tax imposed by state and local governments, calculated as a percentage of the sales price of goods and certain services; but paid as a use tax.
Consumer use tax (sometimes referred to as a compensating use tax) is complementary to the sales tax. It is a type of excise tax imposed by state and local governments, calculated as a percentage of the sales price of goods and certain services; but paid as a use tax.
Examples of use tax So lets assume that you purchased some furniture for your Massachusetts business or home. ing to the state, if you buy furniture for your Massachusetts business or home from an out-of-state company, you dont pay sales tax, but you still have to pay the use tax.

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Sales tax and use tax are both types of taxes that are imposed on the sale of goods and services. The main difference between the two is that sales tax is a tax on the sale of tangible personal property, while use tax is a tax on the use of that property within a state.

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