California Use Tax Basics (Publication 110)
Guidelines
These general guidelines do not address exemptions or exclusions that may apply in specific situations.
| Use Tax—When does it apply? How do you pay it? | |
|---|---|
| Type of Taxable Transaction or Circumstance of Use, Storage, or Consumption | Reporting the Sale or Purchase and Paying the Use Tax Due |
| If you are a California business with a seller's permit | |
| Taxable lease | If you are the lessor: Collect use tax from purchaser; report lease payments in "total sales" on sales and use tax return; pay tax with return. If you are the lessee: pay tax to the lessor. Please note: You may owe the tax if the lessor doesn't collect it. |
| Taxable use, storage, or consumption of an item in California purchased without the payment of California tax (see "When does use tax apply?") | Report purchase on return as "purchase subject to use tax" and pay tax. You may be able to take a credit if you paid another state's sales or use tax (see instructions on return). |
| If you are a seller located in another state | |
| Taxable sale to California customer, if you are engaged in business in California (have location or representative in California or otherwise have nexus within California). | You must register, collect use tax from customers, and pay the tax to us with your tax return (see R&TC 6203, Collection by Retailer and Regulation 1684, Collection of Use Tax by Retailers, Collection of Use Tax by Retailers).
Retailers located outside of California may be required to register with us, collect the California use tax, and pay the tax to us based on the amount of their sales into California, even if they do not have a physical presence in the state. For more information, please see our online guide, Use Tax Collection Requirements Based on Sales into California Due to the Wayfair Decision. |
| Taxable sale to California customer if you are not engaged in business in California. | You may voluntarily register to collect and pay use tax. If you do not, your customer must pay it to us. |
| If you are a California resident who is not required to hold a seller's permit | |
| Registered "qualified purchaser" with a use tax account. | Report purchases subject to use tax on your use tax return. You may be able to take a credit if you paid another state's sales or use tax (see instructions on return). |
| Purchase of merchandise, the sale of which is otherwise subject to tax from an out-of-state retailer (including foreign merchant) who does not collect California sales or use tax. | You may report and pay use tax on your California income tax return or you may report the purchases subject to use tax directly to us by selecting Register, and then select File and Pay Your One Time Use Tax. Once you have registered, you can pay any use tax due by filing your return. You can also register to report use tax in person at any of our offices. Please contact our Customer Service Center for assistance at 1-800-400-7115 (TTY:711). (Unless you are required to register or are registered as a "qualified purchaser" with a use tax account). You may be able to take a credit if you paid another state's sales or use tax. If you make recurring taxable purchases, you may obtain a consumer use tax account. |
| Purchase from private party of vehicle, undocumented vessel (registered with DMV), documented vessel (registered with U.S. Coast Guard), aircraft, or mobilehome. | Pay tax to the Department of Motor Vehicles (DMV) (vehicles, undocumented vessels); to us (documented vessels, aircraft); to a registered broker (documented vessels, aircraft); or to the Department of Housing and Community Development (mobilehomes). |
Revision June 2024