California Use Tax For Foreign Purchases

Generally, use tax applies to purchases of tangible personal property made outside the United States and brought into, or shipped into California for storage, use, 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. However, there are certain exceptions (see below).

Purchases not subject to use tax

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

  • Hand carried items. The first $800 of goods that are 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 goods sent or shipped to California.
  • Gifts you received while abroad. You should obtain and keep a signed letter from the giver describing the item and stating it was a gift, and not compensation. However, tax does apply to property which you purchased to give to another person as a gift, including a gift to a spouse.
  • Purchases for resale. If you operate a business here in California and are required to hold a seller's permit, items you purchase to resell in the regular course of your business are generally not subject to tax. However, your purchases of items for use in your business in California, for example equipment, consumable supplies or other tangible assets, are subject to use tax.
  • Purchases for use outside of California. Your purchase of property (other than vehicles, vessels, or aircraft) outside of California is generally not considered to have been purchased for use in California and use tax does not apply if the property is:
    • delivered outside of California,
    • first functionally used outside of California, and
    • used, stored, or both used and stored outside of California for more than 90 days from the date of purchase to the date of entry into California.*

    *This is exclusive of any time the property was being shipped or stored for shipment to California.

    However, in general, if you purchase property outside of California and first functionally use 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 property was purchased for use outside of California. For more information, see Regulation 1620, Interstate and Foreign Commerce.

Please note: different rules apply to purchases of vehicles, vessels or aircraft; see our Tax Guide for Purchasers of Vehicles, Vessels, & Aircraft.

For all purchases, you should retain documentation, such as receipts, invoices, shipping documents, etc., to support your claim that your purchase(s) brought or shipped to California is not subject to use tax.

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

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

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. For example, purchases of antiques more than 100 years old are subject to California use tax even if the purchase was exempt from the import duties.

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

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

If you paid any Value-Added Tax (VAT) on your foreign purchase, those charges must be included as part of the purchase price subject to tax when you report and pay the use tax. You may not take a credit for VAT paid against the California use tax due.

Some international sellers are registered to collect California use tax. If you pay California use tax on your foreign purchase, you may take a credit against your California use tax liability. You must retain documentation (for example, receipt or invoice from seller) to show that the use tax was paid to a seller registered with California.

Calculating and reporting the use tax owed

To calculate and report the use tax owed, please see the For Personal Use or For Business Use tabs.