When an out-of-state retailer does not collect the tax for a purchase delivered to California, then the buyer is responsible for payment of use tax. This applies to any physical merchandise purchased from outside of California that would have had sales tax added to it if it had been bought inside the state. For example, use tax is owed for:
- Purchases from mail-order catalogs, Internet retailers, online auctions and television shopping networks.
- Taxable items bought out-of-state and brought back into California within 90 days of purchase.
- Items in which the seller charged California sales tax below the sales tax rate for the county and district where the consumer resides.
- Purchases of vehicles, vessels, mobile homes and aircraft from a business or individual that does not hold a California seller’s permit.
- Purchases of untaxed tobacco products from an out-of-state retailer. The buyer is also required to pay excise tax.
- Purchases from a retailer in a foreign country. However, the first $800 of tangible personal property personally hand-carried from the foreign country into California by an individual within any 30-day period is exempt from use tax.
Not sure if you or your business owes use tax to California? Let the knowledgeable and experienced tax attorneys of Brown, PC help guide you through the intricacies of California use tax laws. We represent clients in Los Angeles and throughout California. Please contact the firm online or by calling 424-252-1100.