Are You Registering For Use Tax

Overview

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

Generally, if sales revenue enhancement would use when y'all buy physical merchandise in California, use tax applies when you make a similar buy without tax from a business located outside the country.

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

If you made purchases for a concern use and may owe revenue enhancement, click on the For Business Use tab for more data and payment options.

If you made purchases for your personal utilise and may owe tax, click on the For Personal Apply tab for more data and payment options. Watch this video for more information almost apply tax:

Did You Know?

Many smart shoppers can discover bargains online, but don't realize they can incur a revenue enhancement nib in the process. California police requires tax on in-state purchases, and also requires tax on items purchased out-of-state for use in California.

How to Pay Apply Revenue enhancement

If you have a California seller's permit, you must pay the apply revenue enhancement due on business related purchases with your sales and use revenue enhancement render in the period when you first used, stored, or consumed the item in California. Study the corporeality of your purchase nether "Purchases subject field to apply tax," (line ii) on the render.

If you lot are a "qualified purchaser," yous must pay your use tax due past filing your return for the previous calendar yr by April 15.

If yous are not required to have a seller'southward permit or a use revenue enhancement account yous must pay utilize tax in one of the following ways.

The easiest style 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 decide the amount of your use tax liability. As office of reporting use tax on the Country Income Tax Render, you may also cull to use a Use Revenue enhancement Lookup Tabular array.
OR
Pay Employ Tax directly to the California Section of Tax and Fee Assistants by using the CDTFA'south electronic registration system;

"Qualified purchasers" under Revenue and Taxation Code section 6225 are business organisation operations that must register with CDTFA to report and pay employ revenue enhancement owed. A "qualified purchaser" means a person that meets all of the following weather:

The person receives at to the lowest degree $100,000 in gross receipts from business organisation operations per calendar year. Note: Gross receipts are the total of all receipts from both in-state and out-of-state business concern operations
The person is not required to hold a seller's allow or certificate of registration for use tax (nether section 6226 of the Revenue and Revenue enhancement Code)
The person is not a holder of a utilise tax direct payment permit as described in department 7051.3 of the Revenue and Tax Lawmaking
The person is non otherwise registered with the CDTFA to study use tax

Sales Tax vs. Use Taxation: What's the Departure?

Tax nerveless by the retailer here in California is called sales tax, and the retailer is responsible for reporting and paying the tax to the state. When an out-of-land or online retailer doesn't collect the tax for an detail delivered to California, the purchaser may owe "use revenue enhancement," which is simply a tax on the use, storage, or consumption of personal property in California.

Exempt Items

Items that are exempt from sales tax are exempt from use taxation too. Utilize tax liabilities are oftentimes created by internet or mail order purchases with out-of-state retailers not required to collect the tax. Be sure to review your receipts from Internet and other out-of-state purchases to determine if revenue enhancement was charged.

Why Is There a Use Taxation?

The use tax, which was created in July 1935, is a companion to California'due south sales revenue enhancement that is designed to level the playing field between in-state retailers who are required to collect tax, and some out-of-state retailers who are non. Apply tax, just similar sales taxation, goes to fund state and local services throughout California.

What Kinds of Purchases Are Taxable?

For questions on whether a purchase is taxable read the California Use Tax Information, or phone call our Customer Service Middle at ane-800-400-7115 (CRS 711).

How Practise I Find My Local Taxation Rate?

You can wait up your local sales and use tax rate.

Vehicles, Vessels, and Aircraft

If yous have questions on how to report and pay utilise tax on the purchase of vehicles, vessels, and shipping, see our Tax Guide for Purchasers of Vehicles, Vessels, & Shipping or refer to Publication 79, Documented Vessels and California Tax, or Publication 79-A, Aircraft and California Tax. The use tax due on these purchases cannot be reported on your California state income taxation return.

Cigarette and Tobacco Products

If you lot are registered with the California Department of Taxation and Fee Administration as a cigarette and/or tobacco products consumer, your purchases of cigarette and tobacco products may not exist reported on your sales and utilise tax return. If yous need additional information, contact our Client Service Center at one-800-400-7115 (CRS 711).

Foreign Purchases

By and large, utilize revenue enhancement too applies to strange purchases of tangible personal holding brought into California for storage, use, or other consumption. More than data virtually items brought into California through U. S. Customs is available online.

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

More often than not, if the item would have been taxable if purchased from a California retailer, it is subject to utilise tax.

For instance, purchases of clothing, appliances, toys, books, furniture, or CDs would be subject to use tax. Purchases not subject field to apply taxation include food for homo consumption such every bit peanut butter and chocolate. Electronically downloaded software, music, and games are not subject area to taxation if no tangible storage media is obtained. Encounter Foreign Purchases for item(due south) purchased in a foreign state and personally carried into this state.

How practise I calculate what I owe?

Utilize the sales and use tax rate applicative to the place in California where the detail is used, stored, or otherwise consumed and apply it to the full purchase price. For personal purchases, this is normally your home accost. Include handling charges.

Example

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

Shipping charges are generally non taxable when items are shipped by common carrier or Us Mail, the invoice separately states charges for aircraft, and the charge is not higher than the bodily toll for aircraft.

How practise I pay the revenue enhancement due?ⁱ

Use revenue enhancement is owed past April 15th the year after you make a purchase for which California tax was non charged. Y'all tin either pay one time a year when you file your state income taxes, or make payments directly to the CDTFA after each purchase.

Option ane: Pay on Your Land Income Tax Forms

On your California state income taxes, using forms 540 or 540 2EZ, just put in the amount owed on the advisable line for the entire year¹.

You tin relieve all of your receipts and written report the exact amount you lot owe or follow the instructions included with your income tax render to use the Utilize Tax Lookup Tabular array for nonbusiness items with a buy price under $ane,000.
Acquire more about the lookup table.

Option 2: Make Payments Directly to the California Section of Tax and Fee Administration

Y'all may pay use tax on a one-time purchase, directly to us. Follow log-in and step-by-step reporting and payment instructions.

If you are late in paying your use revenue enhancement, you may be 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 equally purchases of cigarettes and tobacco products cannot exist reported on your California state income tax render. If yous hold a California consumer utilize taxation account, you are required to report purchases subject to use revenue enhancement directly to the states and may not report the tax on your income revenue enhancement return.

For More Data

If yous have questions or would like boosted information, y'all may call our Customer Service Center at 1-800-400-7115, or your local CDTFA 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 Cyberspace, past mail, or in person) if both of the following apply:

The seller does not collect California sales or utilize tax. Cheque the purchase invoice or receipt to verify if the tax was added past the seller.
Yous use, give abroad, store, or eat the item in California. Report purchases of items that would have been taxable if purchased from a California retailer.

For case, you would include purchases of equipment, supplies, and books. Examples of purchases non bailiwick to tax include nutrient for human being consumption such as peanut butter and chocolate. As well, electronically downloaded software, music, and games are non subject field to tax if no tangible storage media is obtained.

How practise I summate what I owe?

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

Example
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 organisation, and was non charged tax during the purchase. How much use taxation does the business owe?
Respond: Find your business organisation' local tax charge per unit at the time of the purchase on this webpage. If your local rate is 8.0%, then yous would owe $six in use tax ($75 x .08 = $6).

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

How does my trade or business pay the tax due?^ane

Your payment method may vary depending upon the type of business.
The following businesses are required to report purchases subject to apply tax direct to the California Department of Tax and Fee Assistants:

Businesses that have a California seller'due south allow.
Businesses, known as Qualified Purchasers, not required to agree a California seller'southward permit, but receive at least $100,000 in annual gross receipts.
Businesses that have a California consumer use tax account.

Businesses that don't fall into i of the higher up categories take two options:

Pay use revenue enhancement on state income tax forms - The business can consummate the worksheet included in the instructions to the income tax return form applicable to its entity to decide the amount owed
You may pay use tax on 1-time purchase. Follow the log-in and step-past-stride reporting and payment instructions.

¹ Purchases of vehicles, vessels, aircraft, and mobile homes, also every bit purchases of cigarettes and tobacco products cannot be reported on your California state income tax return. Please call our taxpayer information department at i-800-400-7115 for more than data.

When is the tax due?

April 15th post-obit the calendar year in which you made your purchase, if you lot are eligible to pay apply revenue enhancement on your California income tax return.

Otherwise, report and pay use tax direct to the California Department of Tax and Fee Assistants at the time you are instructed to file your returns.

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

For More Data

If yous have questions or would similar additional data, y'all may phone call our Customer Service Heart at one-800-400-7115, or your local CDTFA office.

Foreign Purchases

Generally, use tax applies to purchases of tangible personal belongings made outside the U.s. and brought into, or shipped into California for storage, utilise, or other consumption. Examples of items purchased by individuals that are brought or shipped into California for use here include artwork, antiques, furniture, jewelry, and clothing. Withal, in that location are certain exceptions (see beneath).

Purchases not subject to use tax

In general, the following purchases are not subject to apply tax:

Mitt carried items. The starting time $800 of appurtenances that are purchased from a retailer in a foreign country by an individual and personally manus–carried into this state from the strange land inside any 30-day catamenia is exempt from use tax. This exemption does not apply to goods sent or shipped to California.
Gifts y'all received while away. Y'all should obtain and go along a signed letter from the giver describing the particular and stating it was a gift, and not bounty. Nevertheless, tax does apply to property which yous purchased to give to another person equally a gift, including a gift to a spouse.
Purchases for resale. If y'all operate a concern hither in California and are required to concur a seller'due south let, items yous buy to resell in the regular form of your business are more often than not not subject to tax. However, your purchases of items for apply in your concern in California, for example equipment, consumable supplies or other tangible assets, are subject to employ taxation.
Purchases for use outside of California. Your purchase of belongings (other than vehicles, vessels, or aircraft) outside of California is generally not considered to accept been purchased for use in California and employ tax does not utilise if the belongings is:
- delivered exterior of California,
- first functionally used exterior of California, and
- used, stored, or both used and stored outside of California for more 90 days from the date of purchase to the engagement of entry into California.*
*This is sectional of any time the holding was existence shipped or stored for shipment to California.
Notwithstanding, in general, if you purchase belongings outside of California and first functionally apply the property in California, your purchase is subject to use tax. "Functional use" means the use for which the property was designed. You should retain documentation to show that the belongings was purchased for use outside of California. For more information, come across Regulation 1620, Interstate and Foreign Commerce.

Please note: dissimilar rules apply to purchases of vehicles, vessels or aircraft; see our Taxation Guide for Purchasers of Vehicles, Vessels, & Shipping.

Other exempt purchases. This includes purchases of food, prescription medicine, and other exempt items under the sales and utilize tax law. For boosted information virtually exemptions, please see Publication 61, Sales and Utilise Taxes: Exemptions and Exclusions.

For all purchases, yous should retain documentation, such equally receipts, invoices, shipping documents, etc., to support your merits that your purchase(s) brought or shipped to California is non subject to use revenue enhancement.

Import fees, duty, foreign taxes, Value-Added Tax (VAT)

In general, you may not take a credit for sales taxation paid to a strange country against the California use tax you owe.

Federal import duties or taxes are imposed under United States Code, Championship 19, section 1505(a) and have no bearing on the application of California sales or employ tax. The fact that a certain purchase is exempt from federal duty does not exempt that item from California use tax. For case, purchases of antiques more than 100 years quondam are subject field to California utilise tax even if the purchase was exempt from the import duties.

If your purchase is subject to California use tax, any amounts you paid equally import fees, duty, or other miscellaneous charges at the time of entry into California are mostly not includable in the measure of revenue enhancement.

Please note: the Federal import duties are imposed on the importer of tape. If the importer of record is a consignee and the consignee is the seller, import duties included in the cost of the property sold are subject to sales and apply tax. See Regulation 1617, Federal Taxes.

If you paid whatever Value-Added Revenue enhancement (VAT) on your strange purchase, those charges must be included equally office of the purchase cost subject to tax when y'all report and pay the utilise tax. You may not take a credit for VAT paid confronting the California utilise tax due.

Some international sellers are registered to collect California apply taxation. If you pay California use taxation on your strange buy, y'all may accept a credit against your California use taxation liability. Y'all must retain documentation (for example, receipt or invoice from seller) to prove that the utilize tax was paid to a seller registered with California.

Calculating and reporting the apply tax owed

To summate and report the use tax owed, please come across the For Personal Use or For Business concern Use tabs.

Resources

Annual Reported Use Taxation Revenue

Annual Reported Use Taxation Acquirement
Source	Registered with CDTFA	Period Fiscal Year Ending (FYE)	Utilise Tax Reported (in millions)
Use Tax Reported by Registered California Consumers	Yes	FYE 06/xxx/2017	$177
Use Tax Reported by Registered Out-of-Country Retailers	Yes	FYE 06/30/2017	$ii,912
Use Tax Reported by Seller'south Let Holders	Yeah	FYE 06/xxx/2017	$1,401
Use Tax Assessed in Audits	Yes	FYE 06/30/2017	$129
Use Revenue enhancement Reported on I-Time, Individual Utilize Taxation Returns	No	FYE 06/thirty/2017	$16
Use Taxation Reported on California Income Tax Returns	No	FYE 06/thirty/2017	$24
Use Tax Reported on Out-of-State Purchases of Vehicles, Vessels, and Shipping	No	FYE 06/30/2017	$28
Use Tax Reported on Foreign Purchases	No	FYE 06/30/2017	$8
Utilise Tax Nerveless by DMV on Private Political party Transactions	No	FYE 06/30/2017	$606
Employ Tax Reported for Mobile Homes	No	FYE 06/30/2017	$2.8
Total	Combined	FYE 06/thirty/2017	$5,303.viii

Updated eleven/2017

Registration and Reporting Requirements & Instructions

Individual or Unregistered Service Business organisation

Registration and Reporting Requirements

Even if y'all are an individual or unregistered service business concern, and are non required to exist registered for whatsoever of the reasons below, yous are still required to study utilize tax on all purchases made from out-of-state retailers in which California tax was not collected.

How to Study and Pay Use Revenue enhancement

If yous are non required to hold a seller's permit or apply tax business relationship (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. Yet, yous may choose to report and pay use tax direct to the California Department of Tax and Fee Administration (CDTFA). Simply employ our online registration to report and pay the tax due.

Seller's Allow Holder

Registration and Reporting Requirements

If y'all agree a California seller'due south let, you must pay the employ taxation 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.

How to Report and Pay Utilize Revenue enhancement

You must study use taxation nether "Purchases Subject to Apply Tax" (Line ii) of your sales and utilize tax render.

Service Business That Makes At To the lowest degree $100,000 in Gross Receipts

Frequent Purchaser of Out-of-State Goods

Registration and Reporting Requirements

If you are a person or business that regularly incurs use tax liabilities, merely are non required to hold a seller's permit and are non required to annals for a utilise tax business relationship every bit a qualified purchaser (see to a higher place), you should arrange to receive consumer apply tax returns by applying for a consumer employ revenue enhancement account online using our online registration.

How to Written report and Pay Use Tax

If y'all concur a consumer employ tax account, you must written report use revenue enhancement on your employ tax render. File online or utilize CDTFA 401-East, State, Local, And District Consumer Use Tax Return.

Purchaser of a Vehicle, Vessel, Aircraft, or Mobile-home

Registration and Reporting Requirements

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, shipping, or mobile-domicile, you may be required to report utilise taxation directly to the CDTFA. Delight see our Tax Guide for Purchasers of Vehicles, Vessels, & Aircraft for more information on reporting use tax on a vehicle, vessel, or aircraft. Please run across Regulation 1610.ii, Mobile-homes and Commercial Coaches for more information on reporting use tax on mobile-homes.

How to Study and Pay Use Tax

Generally, use tax on private purchases of vehicles and undocumented vessels is paid to the Department of Motor Vehicles (DMV) at the fourth dimension of registration.

You lot tin can register online to study and pay utilize taxation on a vehicle, a vessel registered with DMV, a documented vessel registered with the U.S. Coast Guard, an shipping, or a mobile-home.

Delight have the post-obit data 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 yr of property
Appointment of Purchase
Total Purchase Price
Location where property volition be used, stored or registered

For additional data nearly how to report and pay utilize tax, please run into publication 79, Documented Vessels and California Tax, publication 79A, Aircraft and California Tax, or follow the instructions in Regulation 1610.two, Mobile-homes and Commercial Coaches.

Purchases of vehicles, vessels, aircraft, and mobile-homes are not to exist reported on your California state income tax return. For additional information, delight see our Revenue enhancement Guide for Purchasers of Vehicles, Vessels, & Shipping.

Purchaser of Cigarette and Tobacco Products

Purchaser of Strange Goods

Registration and Reporting Requirements

The first $800 of tangible personal property that is purchased from a retailer in a foreign land by an individual and personally manus-carried into this state from the foreign land within whatsoever 30-day period is exempt from use taxation. This exemption does not apply to holding sent or shipped to this state. You are required to report use revenue enhancement due on whatever purchases of foreign appurtenances non meeting this exemption. Please see Foreign Purchases for additional data on reporting requirements for strange purchases.

How to Report and Pay Utilize Revenue enhancement

If you purchase strange goods that practice not qualify for any exclusion, y'all should report and pay employ revenue enhancement using the method based on your purchaser type as described above (individual, seller'southward let holder, etc.) Please see Foreign Purchases for additional information on reporting requirements for strange purchases.

Storage and Apply Exclusion

Use Tax Table

Apply Tax Banners

Forms:

CDTFA-101 Claim for Refund or Credit
CDTFA-101-DMV Claim for Refund or Credit for Tax Paid to DMV
CDTFA-106 Vehicle/Vessel Use Tax Clearance Request
CDTFA-345-QP Qualified Purchaser - Registration Update
CDTFA 401-A2 State, Local, And District Sales and Use Taxation Render
CDTFA 401-East State, Local, And Commune Consumer Use Tax Return

Publications:

44 District Taxes
52 Vehicles and Vessels: How to Request an Exemption from California Use Revenue enhancement
61 Sales and Utilize Taxes: Exemptions and Exclusions
79 Documented Vessels and California Tax
110 California Use Tax Basics
117 Filing a Merits for Refund
123 California Businesses: How To Identify And Report California Use Tax Due
126 Mandatory Use Tax Registration for Service Enterprises
177 Internet Sale Sales and Purchases
217 Guide to Reporting Out-of-State Purchases

Regulations:

1610 Vehicles, Vessels, and Aircraft
1610.2 Mobile Homes and Commercial Coaches
1620 Interstate and Foreign Commerce
1684 Drove of Use Tax past Retailers
1685 Payment of Tax by Purchasers
1686 Receipts for Tax Paid to Retailers
1699 Permits
1823 Awarding of Transactions (Sales) Taxation and Use Revenue enhancement
1827 Collection of Use Tax by Retailers (district taxes)