You may owe use tax if you make purchases from out of state retailers (for example, purchases made by telephone, over the Internet, by mail, or in person) where sales or use tax was not paid and you use those items in California. If you have questions about whether a purchase is taxable, go to the State Board of Equalization’s website at boe.ca.gov, or call their Customer Service Center at 1.800.400.7115 (TTY) 711 (for hearing and speech disabilities.)
Some taxpayers are required to report business purchases subject to use tax directly to the State Board of Equalization. However, they may report certain
personal purchases subject to use tax on the FTB income tax return. You may not report use tax for business purposes on your income tax return
if you:
- Have or are required to have a California seller’s permit.
- Are not required to hold a California seller’s permit, but receive at least $100,000 in gross receipts.
- Are otherwise required to be registered with the State Board of Equalization for sales or use tax purposes.
Note: You may not report use tax on your income tax return for certain types of transactions. These types of transactions are described in detail below in the instructions. The Use Tax Worksheet and Estimated Use Tax Lookup Table will help you determine how much use tax to report. If you owe use tax but you do not report it on your income tax return, you must report and pay the tax to the State Board of Equalization. For information on how to report use tax directly to the State Board of Equalization, go to their website at boe.ca.gov and click on Find Information About Use Tax under the heading How Do I.
Failure to report and pay timely may result in the assessment of interest, penalties and fees. See page 20 of the 540 instructions for a general explanation of California use tax.