Qualified Purchaser Program

Assembly Bill (AB) x4-18 (Stats. 2009, ch. 16), enacted in 2009, added section 6225 to the Revenue and Taxation Code (R&TC), which required a “qualified purchaser” to register with the California Department of Tax and Fee Administration (CDTFA) and report and pay use tax directly to us when the tax was not paid to a retailer required to collect the tax or to a retailer the qualified purchaser reasonably believed was required to collect the tax. Upon registration, qualified purchasers are required to provide information, including the name under which they transact or intend to transact business and the location of their place of business. Section 6225 does not apply to the purchase of a vehicle, vessel, or aircraft.

Prior to January 1, 2024, a “qualified purchaser” was defined as a person that received at least $100,000 in gross receipts from their business operations per calendar year and was not otherwise required to be registered with us. Gross receipts are the total of all receipts from both in-state and out-of-state business operations.

Beginning January 1, 2024, AB 1097 (Stats. 2023, ch. 355) revised the definition of a “qualified purchaser” under R&TC section 6225 to eliminate the requirement that the person receives at least $100,000 in gross receipts per calendar year from business operations. It instead requires that the person makes more than $10,000 in purchases subject to use tax (excluding vehicles, vessels, or aircraft) per calendar year where the use tax imposed on those purchases has not otherwise been paid to a retailer engaged in business in this state or authorized to collect the tax. This change is effective from January 1, 2024, through December 31, 2028.

On January 1, 2029, the definition of a “qualified purchaser” will revert to a person receiving at least $100,000 in gross receipts per calendar year from business operations and is not otherwise required to be registered with us.

Please visit the Qualifications webpage for more information.

If you have a California business that meets the requirements of a qualified purchaser, you can register online using our Online Services. For information on how to register online, please visit the Registrations webpage from the Online Services guide. If you have any questions regarding the qualified purchaser program, please call your local CDTFA office or our Customer Service Center at 1-800-400-7115 (TTY:711). Customer service representatives are available Monday through Friday from 7:30 a.m. to 5:00 p.m. Pacific time, except state holidays.

For an explanation of use tax, please see California Use Tax Information, publication 123, California Businesses: How to Identify and Report California Use Tax Due, or publication 110, California Use Tax Basics.