California use tax applies to taxable goods you buy for use in California when no California sales tax was collected at the point of sale. The rate matches the sales tax rate at the location where you use or store the item, which runs from 7.25% at the statewide base to as high as 11.25% once local district taxes are added. Most individuals report what they owe once a year on their state income tax return.
When You Actually Owe Use Tax
California’s marketplace facilitator law, effective October 1, 2019, made this question much simpler for ordinary shoppers. Under Revenue and Taxation Code Section 6042, platforms like Amazon, eBay, Etsy, and Walmart’s online marketplace are treated as the retailer on every sale made through them and must collect California tax.1California Department of Tax and Fee Administration. Sales and Use Tax Law Section 6042 If California tax already appears on your receipt, nothing more is owed.
Use tax kicks in when no California tax was collected at all. The common situations:
- Buying from a small out-of-state retailer’s own website that doesn’t collect California tax.
- Buying something while traveling in another state and bringing it home.
- Buying a used item from a private seller located outside California.
- Ordering from a catalog or by phone from a seller outside California’s collection network.
The delivery method is irrelevant. Whether you carry the item across the state line yourself or a freight company drops it at your door, the obligation is the same. The rule covers tangible personal property generally: furniture, electronics, clothing, jewelry, appliances, building materials, and similar goods. If a California store would have charged sales tax on it, use tax applies when you bring it in untaxed. The statutory basis is Revenue and Taxation Code Section 6201.2California Legislative Information. California Code RTC Division 2 Part 1 Chapter 3 Article 1 Section 6201
Vehicles, vessels, and aircraft are handled separately. California collects use tax on those at registration through the DMV, so you don’t report them on your income tax return or a CDTFA filing.
What’s Exempt
The exemptions that apply to sales tax apply equally to use tax. The ones that matter most for everyday shoppers:
- Most groceries. Food for human consumption is exempt under Revenue and Taxation Code Section 6359, covering produce, meat, dairy, cereal, and bottled water. Prepared meals, restaurant food, hot food sold for immediate consumption, and vending-machine food are not exempt. Alcohol and carbonated beverages are also excluded from the food exemption, and dietary supplements in pill or capsule form are taxable.3California Legislative Information. California Code RTC Division 2 Part 1 Chapter 4 Article 1 Section 6359
- Prescription medicine. Medicines prescribed by a licensed physician, dentist, or podiatrist and dispensed by a pharmacist are exempt under Section 6369.4California Department of Tax and Fee Administration. Sales and Use Tax Law Section 6369
- Items bought for resale. If you buy inventory to resell and don’t use it personally first, you can purchase it tax-free with a resale certificate. If you later pull something out of inventory for your own use, you owe use tax at that point.5Justia Law. California Code RTC Article 3 Presumptions and Resale Certificates
How Much You Owe
The statewide base rate is 7.25%. Cities and counties add local district taxes on top, generally between 0.10% and 2.00% or more. As of January 2026, combined rates across California range from 7.25% to 11.25%.6California Department of Tax and Fee Administration. California City and County Sales and Use Tax Rates The rate is based on where you use or store the item, not where you bought it. The CDTFA has an address lookup tool for the exact rate at your location.
To calculate the exact tax, multiply the purchase price (including any shipping or handling the seller charged) by the combined rate at your location. At a 9.50% rate, a $2,000 item generates $190 in use tax, before any credit for tax paid elsewhere.
The Lookup Table Shortcut
If your untaxed purchases for the year were all personal items each costing less than $1,000, you can skip itemizing and use the CDTFA’s use tax lookup table. It gives a flat estimated amount based on your adjusted gross income:7California Department of Tax and Fee Administration. California Use Tax Table
- Under $10,000 AGI: $0
- $10,000 to $49,999: $1 to $4
- $50,000 to $99,999: $5 to $9
- $100,000 to $149,999: $10 to $12
- $150,000 to $199,999: $15 to $17
- Over $199,999: AGI multiplied by 0.009%
The table isn’t available for business purchases or for any single item that cost $1,000 or more. Those have to be calculated at your actual district rate.
Credit for Tax Paid Elsewhere
If you already paid sales or use tax to another state on the same item, Revenue and Taxation Code Section 6406 gives you a dollar-for-dollar credit against your California liability, capped at what California would have charged.8California Legislative Information. California Code RTC Division 2 Part 1 Chapter 4 Article 3 Section 6406 A laptop bought in Oregon generates no credit because Oregon has no sales tax, so you owe the full California rate. A laptop bought in a state that charged 5% leaves you owing the difference between that 5% and your California rate.
How to Report and Pay
How you file depends on whether you’re an individual or a business meeting the “qualified purchaser” threshold.
Individuals
Most California residents report use tax on their annual Form 540 state income tax return. There’s a dedicated line for it. You enter either the amount calculated from your receipts or the figure from the lookup table, and it folds into your overall tax owed or your refund. The return is due April 15 of the following year.
Qualified Purchasers
Through December 31, 2028, a “qualified purchaser” is any person or business making more than $10,000 in use-tax-eligible purchases per calendar year on which California tax wasn’t collected.9California Department of Tax and Fee Administration. California Use Tax Basics Publication 110 – Paying Use Tax The threshold is aimed at entities that don’t hold a seller’s permit and wouldn’t otherwise file with the CDTFA. Vehicles, vessels, and aircraft don’t count toward the threshold because they’re taxed at DMV registration. Qualified purchasers must register with the CDTFA and file annual returns on Form CDTFA-401-E through the agency’s online portal.10California Department of Tax and Fee Administration. CDTFA-401-E State, Local, and District Consumer Use Tax Return Payment options include electronic funds transfer, electronic check, or credit card (with a third-party processing fee).
Penalties, Interest, and the Audit Window
Not paying doesn’t make the obligation disappear. Under Revenue and Taxation Code Section 6591, filing late or paying late each carries a 10% penalty, but the combined penalty on a single return caps at 10%, so you won’t get hit for 20% stacked.11California Legislative Information. California Code RTC Division 2 Part 1 Chapter 5 Article 6 Section 6591 Interest runs from the original due date until payment. For 2026, the CDTFA rate on unpaid tax is 10% per year, recalculated every six months at the IRS rate plus three points.12California Department of Tax and Fee Administration. Interest Rates
The CDTFA generally has three years from when you filed to assess additional tax. If you never filed, the window extends to eight years, and neither limit applies in cases of fraud or intent to evade.13California Department of Tax and Fee Administration. Sales and Use Tax Law Section 6487 Skipping a filing nearly triples the state’s time to come after you.
Deliberate evasion carries criminal exposure. Willful failure to file or pay can be charged as a misdemeanor with fines up to $5,000 and up to a year in jail. When unpaid tax exceeds $25,000 within a 12-month period and intent to evade is shown, the charge becomes a felony with fines up to $20,000 and 16 months to three years in state prison.