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USE TAX: Guide to Reporting Out-of-State Purchases
Publication 217 www.cdtfa.ca.gov December 2017
Use tax has been in effect since How do I pay use tax? Did you make purchases of the
July 1, 1935. Use tax is intended to • You can report your purchase(s) following items from out-of-state
protect California sellers who would be
subject to use tax on our website at retailers without payment of tax?
at a competitive disadvantage when out- www.cdtfa.ca.gov by selecting Make a
of-state retailers sell goods to California Payment, and then select Pay use tax q Books
customers without charging tax. for one-time purchases from out-of-state q Electronics
retailer.
Sales tax generally applies to the sale of q Computer equipment
merchandise in the state. Use tax applies • Once you have registered, you can pay q Manufacturing equipment
to the use, storage, or other consumption any use tax due by filing your return.
of those same items when a similar You can also register to report use tax q Other________________
purchase was made from outside the in person at any of our offices, or If yes, you will need to report and pay use
state. The use tax is set at the same rate • Report use tax on your FTB Income tax on these purchases.
as the state’s sales tax and must be paid Tax Return
directly to the California Department of Where do I look in my records for
Tax and Fee Administration (CDTFA) Who is not eligible to report tax these purchases?
or on your Franchise Tax Board (FTB)
on the FTB Income Tax Return? q Email receipts
Income Tax Return.
The following taxpayers are required
q Sales invoices
to report purchases subject to use tax
Use tax is your responsibility. directly to the CDTFA and may not report q Purchase orders
Payment of use tax is generally the use tax on their income tax return: q Credit card statements
responsibility of the purchaser. Many
• Businesses that have a California q Bank statements
out-of-state companies are “engaged in
seller’s permit.
business,” or have a physical presence q Other________________
in California and must register with the • Businesses that are not required to These records will help you determine
CDTFA to collect use tax on their retail hold a California seller’s permit, but whether or not you owe use tax.
sales to California customers. Some receive at least $100,000 in annual
out-of-state companies will voluntarily gross receipts (includes rental, multiple
register with the CDTFA and collect businesses, and out-of-state income).
tax as a courtesy to their California Please see our Qualified Purchaser For More Information
customers. However, if a company is not Program information on our website for
“engaged in business” in California, it more information (type in “Qualified Internet
Purchaser Program” in our search box).
will generally not charge California tax. www.cdtfa.ca.gov
• Individuals or businesses that have a
It is your responsibility to report and
California consumer use tax account. Customer Service Center
pay use tax for purchases you make from
1-800-400-7115
out-of-state companies that don’t charge
Did you purchase from one or TTY:711
you tax.
more of these common out-of- Customer service representatives are
Exemptions from use tax state retailers? available weekdays from 8:00 a.m. to
Generally, the same types of items that q Mail order catalog 5:00 p.m. (Pacific time), except state
are subject to sales tax are subject to q Internet retailer holidays.
use tax. Use tax does not apply to items California Department of
q Television shopping network
specifically exempt from sales tax such Tax and Fee Administration
as prescription medicines and most food q Online auction PO Box 942879
items purchased at a grocery store. If yes, you will need to check your records Sacramento, CA 94279-0001
to determine whether or not you paid tax.
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