USE TAX:          Guide to Reporting 
                                                                                     Out-of-State Purchases

Publication 217                                       www.cdtfa.ca.gov                                      October 2019

While sales tax generally applies to        How do I pay use tax?                    What items purchased from out-of-
the sale of merchandise in the state,       • You can report your purchase(s)        state are subject to additional excise 
use tax applies to the use, storage, or 
                                            subject to use tax on our website        taxes and fees?
other consumption of those same items       at www.cdtfa.ca.gov by selecting 
purchased from outside the state. Use       Make a Payment, and then select Pay      q Tires
tax helps protect California sellers who    use tax for one-time purchases from      q Lead-acid batteries
would be at a competitive disadvantage      out-of-state retailer.
when out-of-state retailers sell goods to                                            q Cigarette and tobacco products
California customers without charging       • Once you have registered, you can      q Covered electronic devices with 
tax. The use tax is set at the same rate    pay any use tax due by filing your        screens larger than 4 inches 
as the state’s sales tax and must be paid   return. You can also register to          (for example, laptops, monitors, 
directly to the California Department       report use tax in person at any of our    televisions, tablets)
of Tax and Fee Administration (CDTFA)       offices, or                              q Lumber products
or on your Franchise Tax Board (FTB)        • Report use tax on your FTB income 
income tax return.                          tax return.                              q Prepaid phone cards
                                                                                     If yes, in addition to reporting 
Use tax is your responsibility.             Who is not eligible to report tax on the and paying use tax, you are also 
Payment of use tax is generally the         FTB income tax return?                   responsible for paying the applicable 
responsibility of the purchaser. Many       The following taxpayers are required     excise tax and fee to the CDTFA.
out-of-state companies are “engaged in      to report purchases subject to use tax 
business,” or have a physical presence      directly to the CDTFA and may not report How do I pay the additional excise 
in California and must register with the    use tax on their income tax return:      taxes and fees?
CDTFA to collect use tax on their retail    • Businesses that have a California      For the purchase of new tires, lead-
sales to California customers. Some         seller’s permit.                         acid batteries, cigarette and tobacco 
out-of-state companies voluntarily                                                   products, and covered electronic 
register with the CDTFA and collect         • Businesses that are not required to    devices, you are required to register for 
California use tax as a courtesy to their   hold a California seller’s permit, but   the applicable account, file a return, and 
California customers. However, if a         receive at least $100,000 in annual      pay the applicable tax or fee. For lumber 
company is not “engaged in business”        gross receipts (includes rental,         products and prepaid MTS, you can 
in California, it will generally not charge multiple businesses, and out-of-state    make a one-time payment of the amount 
California use tax.                         income). Please see our Qualified        owed. For additional information on how 
                                            Purchaser Program information on 
It is your responsibility to report and     our website for more information         to pay, please visit our website.
pay use tax for purchases you make          (type in “Qualified Purchaser            Please note: you may not report the 
from out-of-state companies that don’t      Program” in our search box).             applicable excise taxes or fees on your 
charge you tax.                                                                      FTB income tax return.
                                            • Individuals or businesses that have a 
                                            California consumer use tax account.
Exemptions from use tax                                                              Where do I look in my records for 
Generally, the same types of items that     Did you purchase from one or more of     these purchases?
are subject to sales tax are subject        these common out-of-state retailers?
to use tax. Use tax does not apply to                                                q Email receipts
items specifically exempt from sales        q Internet retailer                      q Sales invoices
tax such as prescription medicines 
                                            q Television shopping network            q Your order history on the seller’s 
and most food items purchased at a 
                                            q Online auction                          website
grocery store.
                                            q Mail order catalog                     q Purchase orders
                                            If yes, you will need to check your      These records will help you determine 
                                            records to determine whether or not you  whether or not you owe California use 
                                            paid tax.                                tax or any additional excise tax or fee.

For more information, visit our website at www.cdtfa.ca.gov. You may also call our Customer Service Center at 1-800-400-7115 
(CRS:711). Customer service representatives are available Monday through Friday from 8:00 a.m. to 5:00 p.m. (Pacific time), except 
state holidays. California Department of Tax and Fee Administration PO Box 942879 Sacramento, CA 94279-0001.