If you purchased items for use in California and did not pay California sales tax at the time of purchase, you may owe California Use Tax. This commonly applies to purchases made online, through mail-order catalogs, or from out-of-state sellers.
TaxSlayer Navigation
State → Edit California Return → Additional Taxes → Use Tax
When Do I Owe California Use Tax?
You may owe use tax if:
- You purchased an item from an out-of-state seller.
- California sales tax was not charged on the purchase.
- The item was purchased for use, storage, or consumption in California.
How Do I Calculate My Use Tax?
California allows two methods to calculate use tax:
Use Tax Worksheet
Within the program is a blue worksheet box showing how to calculate the use tax to enter. The blue worksheet is provided as a calculation tool. Enter the final California use tax amount in the Use Tax field of your return.
Use the worksheet if:
- You want to calculate the exact tax due based on your actual purchases.
- You purchased items for use in a trade or business and are not registered with the California Department of Tax and Fee Administration (CDTFA).
- You purchased one or more items costing $1,000 or more each.
If you have a combination of purchases over and under $1,000, you may:
- Use the worksheet for all purchases, or
- Use the worksheet for items costing $1,000 or more and business purchases, and use the Estimated Use Tax Table for eligible non-business purchases under $1,000.
Estimated Use Tax Table
You may use the Estimated Use Tax Table if you are not required to use the worksheet.
Use Tax Question
If your calculated use tax is $0, you will be asked:
Did you pay your use tax obligation directly to CDTFA?
- Yes
- No
Answer based on whether you already reported and paid the tax directly to the California Department of Tax and Fee Administration.
Special Rules for Foreign Purchases
Items purchased outside the United States and brought or shipped into California may be subject to California use tax. Common examples include artwork, antiques, furniture, jewelry, and clothing.
Purchases Generally Not Subject to Use Tax
The following purchases may qualify for an exemption:
- Hand-carried items: The first $800 of goods purchased from a retailer in a foreign country and personally hand-carried into California within any 30-day period is exempt from use tax. This exemption does not apply to items that are mailed or shipped to California.
- Gifts received while abroad: Gifts received from another person while outside the United States are generally not subject to use tax. However, items you purchase to give as gifts may still be taxable.
- Purchases for resale: If you hold a California seller's permit, items purchased for resale are generally not subject to use tax.
- Property purchased and used outside California: In general, property delivered, first used, and used outside California for more than 90 days before entering California may not be subject to use tax. Different rules apply to vehicles, vessels, and aircraft.
Important
You should keep receipts, invoices, shipping records, and other documentation to support any exemption claimed for foreign purchases