When is use tax due

However, there are certain exceptions see below. For all purchases, you should retain documentation, such as receipts, invoices, shipping documents, etc. 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 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 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 , 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. Even if you are an individual or unregistered service business, and are not required to be registered for any of the reasons below, you are still required to report use tax on all purchases made from out-of-state retailers in which California tax was not collected.

If you are not required to hold a seller's permit or use tax account see below , the easiest way to pay use tax is to report it on your California Income Tax Return found at www. Follow the instructions included with your income tax return. Complete the worksheet included in those instructions to determine the amount of your use tax liability.

Simply use our online registration to report and pay the tax due. If you hold a California seller's permit, you must pay the use tax due on purchases you make from out-of-state retailers that were not otherwise taxed and taxable merchandise you withdraw from resale inventory for personal or business use. You must report use tax under "Purchases Subject to Use Tax" Line 2 of your sales and use tax return. Please see the Frequently Asked Questions for Qualified Purchasers to determine if you are required to register.

More Information:. You must pay your use tax due by filing your annual use tax return for the previous calendar year by April If you are a person or business that regularly incurs use tax liabilities, but are not required to hold a seller's permit and are not required to register for a use tax account as a qualified purchaser see above , you should arrange to receive consumer use tax returns by applying for a consumer use tax account online using our online registration.

If you hold a consumer use tax account, you must report use tax on your use tax return. If you purchase from a seller who does not hold a California seller's permit and did not pay tax on the purchase of a vehicle, vessel, aircraft, or mobile-home, you may be required to report use tax directly to the CDTFA. Please see Regulation Generally, use tax on private purchases of vehicles and undocumented vessels is paid to the Department of Motor Vehicles DMV at the time of registration.

You can register online to report and pay use tax on a vehicle, a vessel registered with DMV, a documented vessel registered with the U. Coast Guard, an aircraft, or a mobile-home.

For additional information about how to report and pay use tax, please see publication 79, Documented Vessels and California Tax , publication 79A, Aircraft and California Tax , or follow the instructions in Regulation Purchases of vehicles, vessels, aircraft, and mobile-homes are not to be reported on your California state income tax return.

You can register online using eReg. If the CDTFA receives information from an out-of-state seller regarding your purchase of untaxed cigarette and tobacco products, you will automatically be registered. If the CDTFA receives information from an out-of-state seller regarding your purchase of untaxed cigarette and tobacco products, you will receive tax returns to report excise and use taxes.

If you receive returns, you are already registered. If you have not received a tax return, please register online to receive returns. Your purchases of cigarette and tobacco products cannot be reported on your California state income tax return. This exemption does not apply to property sent or shipped to this state. You are required to report use tax due on any purchases of foreign goods not meeting this exemption.

Please see Foreign Purchases for additional information on reporting requirements for foreign purchases. If you purchase foreign goods that do not qualify for any exclusion, you should report and pay use tax using the method based on your purchaser type as described above individual, seller's permit holder, etc.

California Use Tax, Good for You. For these purchases, the buyer is required to pay use tax separately. Watch this video for more information about use tax: Use Tax. Use Tax — Foreign Travel. Measure ad performance.

Select basic ads. Create a personalised ads profile. Select personalised ads. Apply market research to generate audience insights. Measure content performance. Develop and improve products. List of Partners vendors. Use tax is a sales tax on purchases made outside one's state of residence for taxable items that will be used, stored or consumed in one's state of residence and on which no tax was collected in the state of purchase.

The use tax rate is the same as the resident's local sales tax rate, which includes both state and local sales taxes. A resident who does not pay use tax may be subject to interest and penalties. For example, California residents are required to pay sales tax on purchases of merchandise such as furniture, gifts, toys, clothing, vehicles, mobile homes, and aircraft. If a Californian purchases clothing from a California retailer, the retailer will collect sales tax from the buyer at the point of sale and remit it to the tax authorities.

No additional tax will be due. Let's say instead that the Californian bought clothing from an online retailer in Oregon. On the other hand, if the Californian purchased groceries in Oregon and did not pay any sales tax on the purchase, generally no use tax would be due because the state of California does not tax the majority of groceries.

Retailers are usually not required to collect sales tax on purchases made by consumers in states where the retailer does not have a physical presence called "nexus" such as a sales office, warehouse or sales representative, so the onus falls on the consumer to calculate and remit the tax to his or her state government. Whether a business owes sales taxes to a particular government depends on the way that government defines nexus.

A nexus is generally defined as a physical presence, but this "presence" is not limited to having an office or a warehouse; having an employee in a state can constitute a nexus, as can having an affiliate, such as a partner website that directs traffic to your business' page in exchange for a share of profits. The use tax, like the sales tax, is assessed upon the end consumer of the tangible good or service, but the difference is who calculates the tax and how it is accounted for.

The sales tax is collected by the seller, who is acting as an agent of the state and thus remits the tax to the state on behalf of the end consumer. On the other hand, the use tax is self-assessed and remitted by the end consumer. The use tax is generally more difficult to enforce than the sales tax and, in practice, is only applied to large purchases of tangible goods. A use tax is supposed to protect in-state retailers against unfair competition from out-of-state sellers that aren't required to collect tax.

As the name implies, use tax applies to items being used in Washington where sales tax has not been paid. It applies to both businesses and individuals. The tax is due when the item is first used in the state, and the tax rate is the same as the sales tax rate where the item is being used. Use tax must be paid by each new owner of the item, and is calculated on the value of the property, which is generally the purchase price. Any item of tangible personal property put to use as a consumer in this state may be subject to use tax.

Note: Consumers that support the charitable activities of nonprofit organizations or libraries by purchasing articles of personal property or winning such articles through a contest of chance per RCW For vehicles, use tax is normally paid to the Department of Licensing at the time or registration.

Refer to WAC for additional information.