When you purchase taxable items or services to be used in New Jersey but do not pay sales tax, you owe use tax. This commonly occurs when purchases are made on the Internet, by phone or mail order, or outside the State from sellers who do not collect New Jersey sales tax. The New Jersey use tax rate is the same as the sales tax rate: 7%. If you paid sales tax to another state at a rate less than 7% on a purchase that would have been taxed in New Jersey, you owe use tax based on the difference between the two rates. For example, if you paid 6% sales tax to another state, you owe 1% use tax to New Jersey. No credit is allowed for sales tax paid to a foreign country. You must pay 7% use tax to New Jersey on such purchases.