California Use Tax Information
Generally, use tax applies to foreign purchases of tangible personal property brought into this state for storage, use, or other consumption. The Board of Equalization has the authority under Revenue and Taxation Code section 7054 to audit duty declarations which you fill out and report to U.S. Customs for property first entering into the United States. However, there are some tax exceptions allowed in the law, subject to verification. The following transactions are not subject to the use tax:
- Effective January 1, 2008, the first $800 per person of tangible personal property hand carried into this state and reported on a single declaration. The exemption may be taken only once within any 30 day period (Revenue and Taxation Code section 6405). Prior to January 1, 2008, the exemption was for the first $400 per person of foreign purchases hand carried into California within any 30 day period. This exemption does not apply to tangible personal property sent or shipped to this state.
- All merchandise purchased for resale, provided you can support that the property will be resold by you and no personal use has been or will be made, other than demonstration and display.
- Items purchased for use outside California are not subject to tax if you can document that the ultimate destination and use will be outside this state.
- Foreign purchases of property used outside California for more than 90 days before entering this state. Different rules apply to the purchase of vehicles, vessels, and aircraft. For more information, please see Regulation 1620, Interstate and Foreign Commerce or Frequently Asked Questions - Exemptions & Exclusions: Vehicles, Vessels, Aircraft.
- Gifts you received while abroad are not subject to use tax. You must provide a signed letter from the donor describing the gift and verifying that no consideration was received. Please note that you are the consumer of items you purchase to give as gifts and you owe use tax on your cost of such merchandise if it exceeds the exemption amount noted above.
- Other exempt purchases such as food, prescription medication/eyeglasses, or any other exempt transactions as allowed by the California Sales and Use Tax Law. Each claim for exemption must be clearly explained.
Please note: 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.