What is a notable disadvantage of the use tax?

The choice highlighting the requirement for active compliance from taxpayers accurately reflects a significant disadvantage of the use tax. Unlike sales tax, which is collected at the point of sale by vendors, use tax requires individuals and businesses to track their own taxable purchases made outside the jurisdiction and report them. This reliance on self-reporting can lead to underreporting, noncompliance, or evasion, as taxpayers might forget to report these transactions or may not fully understand their obligations.

Moreover, the self-assessment nature of the use tax can create administrative challenges for both taxpayers and tax authorities. Taxpayers must maintain detailed records and be diligent in calculating the taxes owed, which can be burdensome. This complexity can deter compliance and result in lower revenue for governments.

The other choices do not capture the essence of this disadvantage as accurately. Generating revenue through property sales is unrelated to the use tax, which pertains to personal purchases instead. The need for transparent record-keeping is more of a requirement than a disadvantage. Similarly, while mandatory reporting is a feature of use tax, it is the active compliance that proves to be a more problematic aspect for taxpayers.