California Use Tax Explained: Online and Out-of-State Buys
The line on your California tax return most people skip, and what it asks for.
California use tax is owed when you buy something taxable without paying California sales tax (from an out-of-state store, website or catalog that didn't collect it) and use it in California. The rate is the same as the sales tax where you use the item, from 7.25% to 11.75%, less any sales tax you paid to another state. Most people report it on their state income tax return, Form 540, line 91.
When you owe it
Use tax fills the gap sales tax leaves. You owe it when all three are true:
- The item would have been taxable if you'd bought it from a California store (clothing and electronics are; most groceries and prescription medicine aren't).
- The seller didn't charge California tax. If your receipt shows California tax, you're done.
- You use, store or give away the item in California.
Most large online retailers and marketplaces now charge California tax at checkout, so for many people use tax comes up only with smaller out-of-state sellers, purchases made in person in another state and shipped home, or items bought abroad.
How much it is
The rate is the combined sales and use tax rate for the place you use the item, not where the seller is. Shipping and handling charges the seller bills you count as part of the price. Two examples for a $1,800 purchase with no tax charged:
| Used in | Rate | Use tax |
|---|---|---|
| Los Angeles | 10.25% | $185 |
| Fresno | 8.35% | $150 |
Look up any city's rate with our sales tax rate lookup.
Credit for tax paid to another state
If you paid sales tax to another state on the same item, you can subtract it, but only up to the California tax on that purchase. Buy the $1,800 item in a state with a 6% sales tax and pay $108, bring it home to Los Angeles, and you owe the $77 difference. If the other state's tax was higher than California's, you owe nothing, but you don't get a refund of the extra.
Reporting it on your tax return
Individuals can report use tax on Form 540, line 91. FTB's instructions give two ways to figure it:
- Use Tax Worksheet: the actual price times your rate, minus other-state credit. Required for any single item of $1,000 or more and for business purchases.
- Estimated Use Tax Lookup Table: for personal items under $1,000 each, you can enter a flat amount based on your California AGI instead of adding up receipts. For example, it's $6 at $60,000 of AGI and $16 at $150,000. Using it means you won't be assessed more use tax on those items.
You can mix the two: the worksheet for the big items, the table for everything else. Line 91 can't be left blank; if you owe nothing, you check a box saying so.
When the income tax return isn't the place
- Vehicles, vessels and trailers registered with DMV, documented vessels and aircraft: handled through DMV or CDTFA, not Form 540.
- Businesses that hold a seller's permit, are registered with CDTFA, or have more than $10,000 a year of untaxed purchases (not counting vehicles, vessels and aircraft) report directly to CDTFA.
Things you bring back from abroad
For items you carry back from another country, use tax is generally due on the amount over the $800 per-person exemption on your U.S. Customs declaration. Items you mail or ship home don't get the exemption.
Run your numbers
Our California Use Tax Calculator follows FTB's worksheet: pick your city for the rate, add other-state tax paid, and optionally add the lookup-table amount for smaller items.
Frequently Asked Questions
Is California use tax the same as sales tax?
It's the same rate, collected a different way. Sales tax is collected by a California seller at the register. Use tax is owed by you when the seller didn't collect California tax, at the rate where you use the item: 7.25% statewide plus any local district taxes.
Do I owe use tax on Amazon purchases?
Usually not. Amazon and other large online sellers and marketplaces collect California tax at checkout, and if California tax appears on your receipt, nothing more is owed. Use tax applies when no California tax was charged.
What happens if I don't pay use tax?
You can be billed for the tax plus interest and penalties. FTB's instructions say failure to report and pay on time may result in interest, penalties and fees, and the income tax return requires an entry on line 91 even when it's zero.
Do I owe use tax on a car bought out of state?
Generally yes, but not through your income tax return. Vehicles, boats and trailers registered with DMV are handled separately: use tax is collected when you register the vehicle in California. Aircraft and documented vessels are handled by CDTFA.
Is there a minimum before use tax applies?
No. Use tax applies to any taxable purchase. FTB's lookup table lets you report an estimate for personal items under $1,000 each instead of tracking every receipt.
This article is for general information only and is not tax advice. Sources: FTB 2025 Form 540 instructions (line 91, Use Tax Worksheet, Estimated Use Tax Lookup Table); CDTFA sales and use tax rates. For questions about whether an item is taxable, contact CDTFA at 1-800-400-7115.