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Your Use Tax Responsibility (Español)

  1. What type of merchandise is subject to use tax?
  2. How do I pay the use tax?
  3. Am I a "qualified purchaser" under section 6225 and required to have a use tax account?
  4. What is the rate for California use tax? What is the rate for my city?
  5. Is the California use tax new?
  6. What is the difference between sales tax and use tax?
  7. Are purchases brought through U.S. Customs subject to tax?
  8. Why would an out-of-state company charge me California sales or use tax?
  9. Can the Board of Equalization require out-of-state companies to register to collect California use tax?
  10. I purchased merchandise from a catalogue company based in Illinois. They mailed the merchandise to me through the U.S. Postal Service. They charged me California tax. Why was I charged tax? Should I report these purchases?
  11. I purchased merchandise over the Internet from a small company in Texas. They shipped the merchandise to me through the U.S. Postal Service and did not charge me California tax. Should I report these purchases?
  12. I purchased a boxed set of CDs by mail order from a company in New York. The company shipped the merchandise to me through the U.S. Postal Service. They did not charge me California tax. I purchased the boxed set of CDs as a gift for a friend. Should I report this purchase?
  13. I mail ordered a large novelty basket filled with assorted specialty luncheon meats, cheeses, and crackers from a company based in Wisconsin. Will California use tax apply to this purchase?
  14. Last week while visiting relatives in Maine I purchased $200 in stereo equipment for use with my system at home in Sacramento, California. When I purchased the equipment I was charged five percent Maine sales tax. Do I owe California use tax on this purchase?
  15. I ordered a stove and refrigerator from a company based in New Hampshire. I ordered the company to ship the items directly to my cabin in Idaho. I plan to install these items in the cabin when I visit there later this year. Do I owe California use tax on this purchase?
  16. My company assigned me to work in Portland, Oregon for nine months. When I first arrived in Portland, I purchased a personal computer and software from a local retailer. Oregon does not have a sales or use tax and I was not charged tax. Do I owe California use tax on the personal computer and software when I return to California?
  17. If I reported use tax on my income tax return or on a use tax return and later realize I made an error in the amount I reported, how do I make a correction?
  18. I would like to get more information on the California use tax. Do you have any publications or regulations available for my reference? Where can I get them?
  1. What type of merchandise is subject to use tax?

    Generally, the same types of items that are subject to sales tax are subject to use tax. Sales and use tax applies to the sale or use of tangible personal property in California. Section 6016 of the Revenue and Taxation Code defines tangible personal property as "personal property which may be seen, weighed, measured, felt, or touched, or which is in any other manner perceptible to the senses."

    In the Sales and Use Tax Law, the sale or use of certain tangible personal property is exempt from both sales and use tax. Examples include cold food products and prescription medicines. A list of items the sale of which are not subject to sales or use tax can be found in publication 61 Sales and Use Taxes: Exemptions and Exclusions. You may also request a copy of publication 61 by calling the Board's Information Center at 800-400-7115.

  2. How do I pay the use tax?
    • If you are not required to have a permit or a use tax account and you have not already paid all use tax due to the Board of Equalization as described below, the easiest way to report and pay the use tax is on your California state income tax return. Follow the instructions included with your income tax return. Complete the worksheet included in those instructions to determine the amount of your use tax liability.
    • If you are not required to have a seller's permit, or use tax account you may report and pay the use tax to the Board of Equalization by downloading a copy of publication 79-B, California Use Tax, or request that a copy is mailed to you by calling our Information Center at 800-400-7115 or TTY/TDD 800-735-2929. Simply complete the use tax return included in the publication and mail it along with your payment to the Board of Equalization address shown on the return. This tax return is due by January 31st of the year following the calendar year in which the use tax liability was incurred. It is not necessary to complete this tax return to report zero use tax.
    • If you have a California seller's permit, you must pay the use tax due on business related purchases with your sales and use tax return for the period when you first used, stored, or consumed the item in California. Report the amount of your purchase under "Purchases subject to use tax" (Line 2) of the return.
    • If you are a “qualified purchaser” as defined by section 6225 of the Revenue and Taxation Code (defined in question #3 below), you are required to register for a use tax account and efile your use tax returns. You can download a copy of the BOE-404-A, Qualified Purchaser Use Tax Registration , application which is available on this web site.
    • If you are a person or business that regularly incurs use tax liabilities, but are not engaged in a business requiring a seller's permit and are not required to have a use tax account, you should arrange to receive Consumer Use Tax returns by applying for a Consumer Use Tax Account. You can download a copy of the California Consumer Use Tax Account Application, which also includes additional information, or call our Information Center at 800-400-7115 and request a copy be mailed to you.
    • If you purchased a vehicle, vessel, or aircraft please review the Frequently Asked Questions for Use Tax on Purchases of Vehicles, Vessels, and Aircraft. If you purchased a mobile home, please review publication 47, Mobile Homes and Factory-Built Housing. This use tax may not be reported on your California state income tax return.
    • If you are registered with the Board of Equalization as a cigarette and/or tobacco products consumer, your purchases of cigarette and tobacco products may not be reported on your California state income tax return. If you need additional information, contact the Excise Taxes Division at 916-327-4208.

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  3. Am I a "qualified purchaser" required to have a use tax account?

    Section 6225 of the Revenue and Taxation Code requires a "qualified purchaser" to register with the Board of Equalization (BOE) and report and pay use tax directly to the BOE. Under this section, a "qualified purchaser" is a person who meets the following conditions:

    • The person receives at least $100,000 in gross receipts from business operations per calendar year. Note: Gross receipts are the total of all receipts from both in-state and out-of-state business operations.
    • The person is not required to hold a seller's permit or certificate of registration for use tax (under section 6226 of the Revenue and Taxation Code).
    • The person is not a holder of a use tax direct payment permit as described in section 7051.3 of the Revenue and Taxation Code.
    • The person is not otherwise registered with the BOE to report use tax. For more information, please see the Special Notice and other Frequently Asked Questions.
  4. What is the rate for California use tax? What is the rate for my city?

    The sales tax and use tax rates are the same. The rate of use tax is determined by where the property will be used, stored or consumed, regardless of where the sale takes place. For information on the tax rate for your area, refer to publication 71, California City and County Sales and Use Tax Rates. You may also request a copy of publication 71 by calling the Board's Information Center at 800-400-7115.

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  5. Is the California use tax new?

    No. The California use tax law became effective on July 1, 1935. Section 6201 of the Revenue and Taxation Code established the use tax to eliminate the price disadvantage of California businesses when California consumers purchase taxable merchandise from out-of-state retailers.

    Legislation was passed in 2003 allowing a use tax line to be added to California's income tax returns. This change makes it easier for consumers to report and pay use tax on their purchases. Several other states allow taxpayers to report use tax on their state income tax returns.

  6. What is the difference between sales tax and use tax?

    The California sales tax is imposed on all California retailers. It applies to all retail sales of tangible personal property in the state. Retailers making sales in the State of California are required to remit the sales tax to the Board of Equalization. Retailers are required to pay and report sales taxes to the Board of Equalization and they have the option of collecting sales tax reimbursement from their customers. Almost all retailers utilize this option. Whether or not a retailer collects the sales tax, the retailer is liable to remit the tax due.

    The California use tax is imposed on consumers of tangible personal property that is used, consumed, or stored in this state. Use tax applies to purchases from out-of-state vendors that are not required to collect tax on their sales. Use tax also applies to most leases of tangible personal property.

    The state sales tax and use tax are "mutually exclusive," which means either sales tax or use tax applies to a single transaction, but not both.

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  7. Are purchases brought through U.S. Customs subject to tax?

    Generally, use tax applies to foreign purchases of tangible personal property brought into this state for storage, use, or other consumption. The Board of Equalization has the authority under Revenue and Taxation Code section 7054 to audit duty declarations which you fill out and report to U.S. Customs for property first entering into the United States. However, there are some tax exceptions allowed in the law, subject to verification. The following transactions are not subject to the use tax:

    • Effective January 1, 2008, the first $800 per person of tangible personal property hand carried into this state and reported on a single declaration. The exemption may be taken only once within any 30 day period (Revenue and Taxation Code section 6405). Prior to January 1, 2008, the exemption was for the first $400 per person of foreign purchases hand carried into California within any 30 day period. This exemption does not apply to tangible personal property sent or shipped to this state.
    • All merchandise purchased for resale, provided you can support that the property will be resold by you and no personal use has been or will be made, other than demonstration and display.
    • Items purchased for use outside California are not subject to tax if you can document that the ultimate destination and use will be outside this state
    • Foreign purchases of property used outside California for more than 90 days before entering this state. Different rules apply to the purchase of vehicles, vessels, and aircraft. For more information, please see Regulation 1620, Interstate and Foreign Commerce.
    • Gifts you received while abroad are not subject to use tax. You must provide a signed letter from the donor describing the gift and verifying that no consideration was received. Please note that you are the consumer of items you purchase to give as gifts and you owe use tax on your cost of such merchandise if it exceeds the exemption amount noted above.
    • Other exempt purchases such as food, prescription medication/eyeglasses, or any other exempt transactions as allowed by the California Sales and Use Tax Law. Each claim for exemption must be clearly explained.

    Please note: Federal import duties or taxes are imposed under United States Code, Title 19, section 1505(a) and have no bearing on the application of California sales or use tax. The fact that a certain purchase is exempt from federal duty does not exempt that item from California use tax.

  8. Why would an out-of-state company charge me California sales or use tax?

    Any out-of-state company that is "engaged in business" in the State of California must register with the Board of Equalization to collect use tax on their retail sales of tangible personal property to California customers.

    "Engaged in business" can include:

    • A permanent or temporary office, distribution center, sales or sample room, warehouse, or other place of business in California.
    • Having a representative in California who makes sales, takes orders, installs merchandise, trains customers, or makes deliveries.
    • Receiving rental payments from the lease of tangible personal property that is located in California. There are many out-of-state companies not physically "engaged in business" in the State of California that make retail sales to California consumers. These companies usually solicit orders via the Internet or through mail order. Their only connection to California is shipping merchandise by U.S. mail or other common carrier to California customers.

    Some out-of-state companies with no physical presence voluntarily register with the Board of Equalization as a courtesy to their California customers. They collect the California use tax from their California customers. This relieves California customers of their use tax liability, if they retain proof of their payment of use tax to the vendor. Once registered with the Board of Equalization the out-of-state company is legally obligated to collect the use tax.

    California consumers are advised to review their receipts from out-of-state companies to determine if they were charged California use tax. It is also important for customers to determine if they were charged the proper rate of tax for the area where they use, store or consume the merchandise. For example, if an Alameda County consumer was only charged 7.25 percent use tax on taxable merchandise, he/she would be liable for the remaining 1.50 percent tax on the purchase because Alameda County has a 9.75 percent sales and use tax rate.

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  9. Can the Board of Equalization require out-of-state companies to register to collect California use tax?

    It depends. If an out-of-state company is "engaged in business" in California they must register with the Board of Equalization to collect use tax on their retail sales of tangible personal property to California customers. However, if an out-of-state company is not "engaged in business" in California, U. S. Supreme Court cases have been interpreted to mean that the Board of Equalization is prohibited from requiring these companies to register to collect California use tax from their customers.

  10. I purchased merchandise from a catalogue company based in Illinois. They mailed the merchandise to me through the U.S. Postal Service. They charged me California tax. Why was I charged tax? Should I report these purchases?

    If the catalogue company charged you California use tax (often referred to as "sales tax" in the catalogue), it is because the company is engaged in business in the State of California or they have voluntarily registered with the Board of Equalization as a courtesy to their customers. Assuming the catalogue company charged you the correct tax rate including the appropriate district tax, you would not need to report these purchases on a return because you already paid the appropriate tax directly to the catalogue company who will remit the tax to the Board of Equalization. To confirm the tax rate for your location, refer to publication 71, California City and County Sales and Use Tax Rates. You may also request a copy of publication 71 by calling the Board's Information Center at 800-400-7115.

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  11. I purchased merchandise over the Internet from a small company in Texas. They shipped the merchandise to me through the U.S. Postal Service and did not charge me California tax. Should I report these purchases?

    The same types of items that are subject to sales tax in California are subject to use tax. For example, if your local retail store would charge you sales tax on the same type of merchandise, it would be subject to use tax if purchased over the Internet.

    If you are not sure if the merchandise you purchased is subject to sales or use tax, refer to publication 61, Sales and Use Taxes: Exemptions and Exclusions, which lists the exemptions to sales or use tax. You may also request a copy of Publication 61 by calling the Board's Information Center at 800-400-7115.

    If you determine the items you purchased are subject to tax, you may report the use tax due on your California income tax return or on the use tax return in publication 79B, California Use Tax.

  12. I purchased a boxed set of CDs by mail order from a company in New York. The company shipped the merchandise to me through the U.S. Postal Service. They did not charge me California tax. I purchased the boxed set of CDs as a gift for a friend. Should I report this purchase?

    Yes, if you make the gift in this state, you would report the purchase price of the boxed set of CDs. The California use tax is imposed on consumers of tangible personal property. It applies when a person buys tangible personal property that will be used, consumed, given away or stored in this state. In this situation, the person purchasing the CDs is the consumer because a gift is a type of use.

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  13. I mail ordered a large novelty basket filled with assorted specialty luncheon meats, cheeses, and crackers from a company based in Wisconsin. Will California use tax apply to this purchase?

    Assuming the value of the novelty basket itself is merely incidental to the total value of the product (less than 10 percent of the retail value of the complete package), you would not report the purchase of this item. Luncheon meats, cheeses, and crackers are food products and their purchase is exempt from sales and use tax.

  14. Last week while visiting relatives in Maine I purchased $200 in stereo equipment for use with my system at home in Sacramento, California. When I purchased the equipment I was charged five percent Maine sales tax. Do I owe California use tax on this purchase?

    Yes, however, Revenue and Taxation Code section 6406 allows you to take a credit for sales or use tax paid to another state. Therefore, a portion of the California use tax you owe on the purchase is offset by the sales tax you paid to the retailer in Maine. Since the sales and use tax rate in Sacramento is 8.75%, use tax of $17.50 would be due on your purchase. However, after deducting the $10 in Maine sales tax you paid when you purchased the equipment, you would only owe $7.50 in California use tax on the purchase.

    Note: For each purchase you can only take a credit for sales tax paid to another state up to the amount of California use tax you owe on that purchase. If you paid an amount in excess of the California use tax due on a purchase you cannot use this additional tax paid to offset the tax due on another transaction. Using the example above, if the tax rate in Maine were 10% and you paid $20 in Maine sales tax, you could not apply the $2.50 in additional tax you paid to offset California use tax you may owe on another purchase.

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  15. I ordered a stove and refrigerator from a company based in New Hampshire. I ordered the company to ship the items directly to my cabin in Idaho. I plan to install these items in the cabin when I visit there later this year. Do I owe California use tax on this purchase?

    No. The California use tax is imposed on consumers of tangible personal property and it applies when a person buys tangible personal property that will be used, consumed, given away or stored in this state. Since the stove and refrigerator were never stored or used within California, you are not required to report or pay California use tax on this purchase.

  16. My company assigned me to work in Portland, Oregon for nine months. When I first arrived in Portland, I purchased a personal computer and software from a local retailer. Oregon does not have a sales or use tax and I was not charged tax. Do I owe California use tax on the personal computer and software when I return to California?

    You would not owe use tax on this purchase since the personal computer was used in Oregon for nine months. Tangible personal property (excluding vehicles, vessels, and aircraft) is not considered to have been purchased for use in this state when:

    • A person uses the item outside of California for more than 90 days after the purchase, exclusive of any shipping or storage time; or
    • A person first uses the item outside of California, brings it back into California within 90 days of purchase, and then uses the item outside of California for more than half the time during the next six months.

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  17. If I reported use tax on my income tax return or on a use tax return and later realize I made an error in the amount I reported, how do I make a correction?

    If you owe more use tax than you originally reported, complete a use tax return identifying the additional amount due and mail it to the Board with payment for the amount due. A use tax return is available in publication 79B, California Use Tax.

    If you over-reported the amount of use tax you actually owe, you should request a refund by completing form BOE-101, Claim for Refund or Credit. If you originally reported the use tax on your California income tax return be sure to state so on your claim for refund. Additional information regarding the refund process is available in publication 117, Filing a Claim for Refund. Do not file an amended income tax return to correct the amount of use tax previously reported.

  18. I would like to get more information on the California use tax. Do you have any publications or regulations available for my reference? Where can I get them?

    You can download the publications listed below (as well as many others) directly from our website, listed by subject or by publication number. You may also obtain these publications free of charge by calling the Board of Equalization's Information Center at 800-400-7115.

    Publications:

    You can download the regulations listed below (as well as many others) directly from our website. You may also obtain these regulations free of charge by calling the Board of Equalization's Information Center at 800-400-7115.

    Regulations:

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