Use tax

Overview

If you bought tax-free items online, in another state, or in a foreign country, you may owe use tax.

Use tax applies to out-of-state purchases made by:

  • Phone
  • Internet
  • Mail
  • In-person

And both of the following apply:

  • The seller does not collect California sales or use tax.
  • You use, give away, store, or consume the item in this state.

Use tax does not apply if you paid sales tax. Items that are exempt from sales tax are also exempt from use tax.

Visit the California Department of Tax and Fee Administration (CDTFA) for more information.

How to calculate

You can calculate your use tax by using one of the following methods:

  • Use tax worksheet.
  • Use tax table.

Use tax worksheet

You must use the Use tax worksheet to calculate your use tax liability, if any of these apply:

  • You prefer to calculate the amount of use tax due based upon your actual purchases subject to use tax, rather than based on an estimate.
  • You owe use tax on any item purchased for use in a trade or business and you are not registered, or required to be registered with the CDTFA to report sales or use tax.
  • You owe use tax on purchases of individual items with a purchase price of $1,000 or more each.

Use tax table

You can use the Estimated use tax lookup table if you’re an individual who is not required to hold a:

  • California Seller’s Permit.
  • Consumer Use Tax account.

The table calculates use tax based on your California Adjusted Gross Income (AGI) and can only be used for purchases less than $1,000. Purchases of $1,000 or more use the Use tax worksheet.

Example

You purchased a computer monitor for $300, a rare coin for $500, and designer clothing for $250 from out-of-state retailers that did not collect tax.

Although the total price of all the items is $1,050, the price of each item is less than $1,000.

Since none of these individual items is $1,000 or more, you are not required to use the Use Tax Worksheet and may choose to use the estimated use tax lookup table.

How to report

Report use tax by either:

If you fail to report use tax, you may be subject to penalties and interest.

Items to report directly to CDTFA

Report use tax due on the following items directly to the CDTFA. Do not report it on your income tax return.

  • Vehicles, vessels, and trailers that must be registered with the Department of Motor Vehicles.
  • Mobile homes or commercial coaches that must be registered annually as required by the Health and Safety Code.
  • Vessels documented with the U.S. Coast Guard.
  • Aircraft.
  • Leases of machinery, equipment, vehicles, and other tangible personal property.
  • Cigarettes and tobacco products when the purchaser is registered with the CDTFA as a cigarette and/or tobacco products consumer.

Exemption

If you traveled to a foreign country and brought items back to California, the first $800 is exempt from use tax if both of the following apply:

  • It was purchased by an individual from a retailer.
  • It was personally hand-carried into California from the foreign country within any 30-day period.

This does not apply to property sent or shipped here.

RTC Section 6405

Use tax is due on the purchase price of the goods you listed on your U.S. Customs Declaration less the $800 per-person exemption.

Visit California Department of Tax and Fee Administration for other purchases not subject to use tax.