Overview

California's sales tax generally applies to the sale of merchandise, including vehicles, in the state. California's use tax applies to the use, storage, or other consumption of those same kinds of items in the state.

Generally, if sales tax would apply when you buy physical merchandise in California, use tax applies when you make a similar purchase without tax from a business located outside the state.

For these purchases, the buyer is required to pay use tax separately.

If you made purchases for a business use and may owe tax, click on the For Business Use tab for more information and payment options.

If you made purchases for your personal use and may owe tax, click on the For Personal Use tab for more information and payment options. Watch this video for more information about use tax:

Did You Know?

For Personal Use

Generally, if the item would have been taxable if purchased from a California retailer, it is subject to use tax.

What items are subject to use tax

Generally, if the item would have been taxable if purchased from a California retailer, it is subject to use tax.

For example, purchases of clothing, appliances, toys, books, furniture, or CDs would be subject to use tax. Purchases not subject to use tax include food for human consumption such as peanut butter and chocolate. Electronically downloaded software, music, and games are not subject to tax if no tangible storage media is obtained. See Foreign Purchases for item(s) purchased in a foreign country and personally carried into this state.

How do I calculate what I owe?

Use the sales and use tax rate applicable to the place in California where the item is used, stored, or otherwise consumed and apply it to the total purchase price. For personal purchases, this is usually your home address. Include handling charges.

  1. Example
  2. Question: I bought a stereo online for $200, including shipping, and had it sent to my home. But, I was not charged tax during the purchase. How much use tax do I owe?
  3. Answer: Find your local tax rate at the time of the purchase on this webpage. If your local rate is 8.0%, then you would owe $16 in use tax ($200 × .08 = $16).

Shipping charges are generally not taxable when items are shipped by common carrier or US Mail, the invoice separately states charges for shipping, and the charge is not higher than the actual cost for shipping.

How do I pay the tax due?1

Use tax is owed by April 15th the year after you make a purchase for which California tax was not charged. You can either pay once a year when you file your state income taxes, or make payments directly to the BOE after each purchase.

Option 1: Pay on Your State Income Tax Forms

On your California state income taxes, using forms 540, 540A or 540Z, simply put in the amount owed on the appropriate line for the entire year1.

You can save all of your receipts and report the exact amount you owe or follow the instructions included with your income tax return to use the Use Tax Lookup Table for nonbusiness items with a purchase price under $1,000. Learn more about the lookup table.

Option 2: Make Payments Directly to the Board of Equalization

You may pay use tax on a one-time purchase item(s) directly to us. Follow log-in and step-by-step reporting and payment instructions. You may also pay use tax on a one-time purchase item(s) with our ePay mobile application.

If you are late in paying your use tax, you may eligible to pay a liability from a previous year and avoid late payment penalties under our In-State Voluntary Disclosure Program.

1 Purchases of vehicles, vessels, aircraft, and mobile homes, as well as purchases of cigarettes and tobacco products cannot be reported on your California state income tax return. If you hold a California consumer use tax account, you are required to report purchases subject to use tax directly to us and may not report the tax on your income tax return; see our General California Use Tax Information.

For More Information

If you have questions or would like additional information, you may call our Customer Service Center at 1-800-400-7115, or your local BOE office.

For Business Use

In general, a business must pay California use tax on purchases from a retailer outside California (for example, by telephone, over the Internet, by mail, or in person) if both of the following apply: 

  • The seller does not collect California sales or use tax. Check the purchase invoice or receipt to verify if the tax was added by the seller.
  • You use, give away, store, or consume the item in California. Report purchases of items that would have been taxable if purchased from a California retailer.

For example, you would include purchases of equipment, supplies, and books. Examples of purchases not subject to tax include food for human consumption such as peanut butter and chocolate. Also, electronically downloaded software, music, and games are not subject to tax if no tangible storage media is obtained.

How do I calculate what I owe?

Use the sales and use tax rate applicable to the place in California where the item is used, stored, or otherwise consumed and apply it to the total purchase price. Include handling charges.

  1. Example
  2. Question: I bought a case of printer paper online for $75, including shipping, for use in my business. I had it sent to my business, and was not charged tax during the purchase. How much use tax does the business owe?
  3. Answer: Find your businessí local tax rate at the time of the purchase on this webpage. If your local rate is 8.0%, then you would owe $6 in use tax ($75 x .08 = $6).

Shipping charges are generally not taxable when items are shipped by common carrier or US Mail, the invoice separately states charges for shipping, and the charge is not higher than the actual cost for shipping.


How does my trade or business pay the tax due?1

Your payment method may vary depending upon the type of business.
The following businesses are required to report purchases subject to use tax directly to the State Board of Equalization:

  • Businesses that have a California seller’s permit.
  • Businesses, known as Qualified Purchasers, not required to hold a California sellerís permit, but receive at least $100,000 in annual gross receipts.
  • Businesses that have a California consumer use tax account.

Businesses that donít fall into one of the above categories have two options:

  1. Pay use tax on state income tax forms - The business can complete the worksheet included in the instructions to the income tax return form applicable to its entity to determine the amount owed
  2. You may pay use tax on one-time purchase. Follow the log-in and step-by-step reporting and payment instructions. You may also pay use tax on a one-time purchase item(s) with our ePay mobile application.

1 Purchases of vehicles, vessels, aircraft, and mobile homes, as well as purchases of cigarettes and tobacco products cannot be reported on your California state income tax return. See General California Use Tax for special rules and reporting requirements, or call our taxpayer information section at 1-800-400-7115

When is the tax due?

April 15th following the calendar year in which you made your purchase, if you are eligible to pay use tax on your California income tax return.

Otherwise, report and pay use tax directly to the Board of Equalization at the time you are instructed to file your returns.

If you are late in paying your use tax, you may eligible to pay a liability from a previous year and avoid late payment penalties under our In-State Voluntary Disclosure Program.

For More Information

If you have questions or would like additional information, you may call our Customer Service Center at 1-800-400-7115, or your local BOE office.

Foreign Purchases

Generally, use tax applies to purchases of tangible personal property made outside the United States and brought into California for storage, use, or other consumption. However, there are some exceptions. The following transactions are not subject to use tax:

  • The first $800 of tangible personal property that a person carries by hand into this state and reports on a single declaration. The exemption may be taken only once within any 30 day period. This exemption does not apply to tangible personal property sent or shipped to California.
  • Any taxable items purchased for resale, demonstration, or display. Keep records that document your intent to resell these items. If you personally use any of those items, use tax will be due.
  • Items you purchase for use outside California. Keep records that document how the items will be used.
  • Purchases of property first used outside California for more than 90 days before entering this state. If purchasing a vehicle, vessel, or aircraft, see our FAQ on exemptions and exclusions.
  • Gifts you received while abroad. You should keep a letter from the giver describing the item and stating it was a gift (i.e. not some form of compensation).
  • 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.

Resources

Annual Reported Use Tax Revenue

Source

Period
Fiscal Year Ending (FYE)

Use Tax Reported
(in millions)

Registered with BOE

Use Tax Reported by Registered California Consumers (excluding Qualified Purchasers)

FYE 06/30/2013

$147

Use Tax Reported by Qualified Purchasers (service businesses)

FYE 06/30/2013

$47

Use Tax Reported by Registered Out-of-State Retailers

FYE 06/30/2013

$2,005

Use Tax Reported by Seller’s Permit Holders

FYE 06/30/2013

$1,517

Use Tax Assessed in Audits

FYE 06/30/2013

$107

     

Not Registered with BOE

Use Tax Reported on One-Time, Individual Use Tax Returns

FYE 06/30/2013

$4

Use Tax Reported on California Income Tax Returns

FYE 06/30/2013

$18

Use Tax Reported on Out-of-State Purchases of Vehicles, Vessels, and Aircraft

FYE 06/30/2013

$26

Use Tax Collected by DMV on Private Party Transactions

FYE 06/30/2013

$486

Use Tax Reported for Mobile Homes

FYE 06/30/2013

$3

Total

$4,360

Updated 02/2014


Registration and Reporting Requirements & Instructions

Individual or Unregistered Service Business

Registration and Reporting Requirements How to Report and Pay Use Tax
Even if you are an individual or unregistered service business, and are not required to be registered for any of the reasons below, you are still required to report use tax on all purchases made from out-of-state retailers in which California tax was not collected. If you are not required to hold a seller's permit or use tax account (see below), the easiest way to pay use tax is to report it on your California Income Tax Return found at www.ftb.ca.gov. 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. However, you may choose to report and pay use tax directly to the Board of Equalization (BOE). Simply use our online registration to report and pay the tax due.

Seller's Permit Holder

Registration and Reporting Requirements How to Report and Pay Use Tax
If you hold a California seller's permit, you must pay the use tax due on purchases you make from out-of-state retailers that were not otherwise taxed and taxable merchandise you withdraw from resale inventory for personal or business use. You must report use tax under "Purchases Subject to Use Tax" (Line 2) of your sales and use tax return. File online or use form BOE 401-A2, State, Local, and District Sales and Use Tax Return.

Service Business That Makes At Least $100,000 in Gross Receipts

Registration and Reporting Requirements How to Report and Pay Use Tax
Generally, if you are a service business that makes at least $100,000 in gross receipts, you are considered a "qualified purchaser" and will be required to register with the Board of Equalization (BOE) and report and pay use tax due on purchases made from out-of-state retailers. Please see the Frequently Asked Questions for Qualified Purchasers to determine if you are required to register.† More Information:

- Publication 126, Mandatory Use Tax Registration for Service Enterprises
- BOE-345-QP, Qualified Purchaser Ė Registration Update
You must pay your use tax due by filing your annual use tax return for the previous calendar year by April 15.

Frequent Purchaser of Out-of-State Goods

Registration and Reporting Requirements How to Report and Pay Use Tax
If you are a person or business that regularly incurs use tax liabilities, but are not required to hold a seller's permit and are not required to register for a use tax account as a qualified purchaser (see above), you should arrange to receive consumer use tax returns by applying for a consumer use tax account online using our online registration. If you hold a consumer use tax account, you must report use tax on your use tax return. File online or use BOE 401-E, State, Local, And District Consumer Use Tax Return.

Purchaser of a Vehicle, Vessel, Aircraft, or Mobile Home

Registration and Reporting Requirements How to Report and Pay Use Tax
If you purchase from a seller who does not hold a California seller's permit and did not pay tax on the purchase of a vehicle, vessel, aircraft, or mobile home, you may be required to report use tax directly to the BOE. Please see Frequently Asked Questions-Use Tax on Vehicles, Vessels, and Aircraft for more information on reporting use tax on a vehicle, vessel, or aircraft. Please see Regulation 1610.2, Mobile Homes And Commercial Coaches for more information on reporting use tax on mobile homes. Generally, use tax on private purchases of vehicles and undocumented vessels is paid to the Department of Motor Vehicles (DMV) at the time of registration.

You can register online to report and pay use tax on a vehicle, a vessel registered with DMV, a documented vessel registered with the U.S.Coast Guard, an aircraft, or a mobile home.

Please have the following information available at the time of registration:

- Name and address of both the purchaser and seller
- Identification number of the property purchased such as the tail number, documentation number or serial number
- Make, model and year of property
- Date of Purchase Total Purchase Price
- Location where property will be used, stored or registered

For additional information about how to report and pay use tax, please see publication 79, Documented Vessels and California Tax, publication 79A, Aircraft and California Tax, or follow the instructions in Regulation 1610.2, Mobile Homes And Commercial Coaches.

Purchases of vehicles, vessels, aircraft, and mobile homes are not to be reported on your California state income tax return. For additional information, please see Frequently Asked Questions - Use Tax on Vehicles, Vessels, and Aircraft.

Purchaser of Cigarette and Tobacco Products

Registration and Reporting Requirements How to Report and Pay Use Tax
If you purchase untaxed cigarette and/or tobacco products from an out-of-state retailer, you will need to register with the BOE to report unpaid excise and use taxes. You can register online using eReg. If the BOE receives information from an out-of-state seller regarding your purchase of untaxed cigarette and tobacco products, you will automatically be registered. More Information:

- Frequently Asked Questions Cigarette & Tobacco Products Internet Program
- Publication 93, Cigarette and Tobacco Products Taxes
If you purchase untaxed cigarette and/or tobacco products from an out-of-state retailer, you will need to register with the BOE to report unpaid excise and use taxes. If the BOE receives information from an out-of-state seller regarding your purchase of untaxed cigarette and tobacco products, you will receive tax returns to report excise and use taxes. If you receive returns, you are already registered. If you have not received a tax return, please register online to receive returns. Your purchases of cigarette and tobacco products cannot be reported on your California state income tax return.

More information:
- Frequently Asked Questions Cigarette & Tobacco Products Internet Program
- Publication 93, Cigarette and Tobacco Products Taxes

Purchaser of Foreign Goods

Registration and Reporting Requirements How to Report and Pay Use Tax
The first $800 of tangible personal property that is purchased from a retailer in a foreign country by an individual and personally hand-carried into this state from the foreign country within any 30-day period is exempt from use tax. This exemption does not apply to property sent or shipped to this state. You are required to report use tax due on any purchases of foreign goods not meeting this exemption. Please see Foreign Purchases for additional information on reporting requirements for foreign purchases. If you purchase foreign goods that do not qualify for any exclusion, you should report and pay use tax using the method based on your purchaser type as described above (individual, seller's permit holder, etc.) Please see Foreign Purchases for additional information on reporting requirements for foreign purchases.

Use Tax Table

Use Tax Graphics


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Publications:


Regulations: