What's the difference between sales and use tax?

From our understanding, sales and use tax are the same thing, just applied to different merchants. A sales tax is what the state calls tax collected by a merchant in-state.

Use tax is what the state calls a tax collected and remitted by what they deem a "remote seller" (i.e. someone who has sales tax in the state but isn't based there.) Many states require remote sellers to follow different sourcing rules than in-state sellers.

Example: Texas is an origin-based sales tax state for sellers based in Texas. This means, if you live in Texas, you should charge sales tax based on your business's location. But if you are considered a "remote seller" in Texas, you should charge sales tax (i.e. use tax) using destination-based rules. This means you would charge sales tax (i.e. use tax) at the rate of your buyer's ship-to address.

You can read all about state sourcing rules here. 

We handle both sales and use tax. For the purposes of our blog and communications, we generally call it all "sales tax" for simplicity's sake.