Estimated Use Tax Table
You may use the Estimated Use Tax Table
to estimate and report the use tax due on
individual nonbusiness items you purchased
for less than $1,000 each, instead of reporting
your use tax liability determined using the Use
Tax Worksheet. This option is only available
if you are permitted to report use tax on your
income tax return and you are not required
to use the Use Tax Worksheet to calculate
the use tax owed on the purchases of such
items. Simply include the use tax liability, that
corresponds to your California Adjusted Gross
Income, and you will not be assessed additional
use tax on the individual nonbusiness items you
purchased for less than $1,000 each.
You may not use the Estimated Use Tax Table
to estimate and report the use tax due on
purchases of items for use in your business or
on purchases of individual nonbusiness items
you purchased for $1000 or more each. See the
instructions for the Use Tax Worksheet if you
have a combination of purchases of individual
nonbusiness items for less than $1,000 each
and purchases of individual nonbusiness items
for more than $1,000.
California Adjusted Gross Income (AGI) Range
State of California
Franchise Tax Board
For additional guidance on your use tax requirements,
go to boe.ca.gov. You can also call the BOE
Information Center at 800.400.7115 with questions
or to request the following BOE publications:
Form 401-DS – Use Tax Return
Publication 61 – Sales and Use Taxes:
Exemptions and Exclusions
Publication 105 – District Taxes and
Delivered Sales
Publication 110 – California Use Tax Basics
Publication 112 – Purchases from Out-ofState Merchant
Use Tax Liability
Less than $20,000
$
7
$20,000 to $39,999
$ 21
$40,000 to $59,999
$ 35
$60,000 to $79,999
$ 49
$80,000 to $99,999
$ 63
$100,000 to $149,999
$ 88
$150,000 to $199,999
$123
For Additional Information:
Go to ftb.ca.gov
Call us at 800.852.5711
For General Information:
Go to taxes.ca.gov
More than $199,999 – Multiply AGI by 0.070% (.0007)
FTB 988 (REV 04-2012)
California Use Tax
and Your Filing Requirements
California Use Tax
and Your Filing Requirements
You just found a great online deal for a state-of-theart computer or a big-screen television. Maybe you
purchased a mail-order book or phone-ordered a
new dining table. For all of these purchases, you may
owe California use tax if you purchased from an outof-state merchant, who did not collect the proper tax
amount. You must pay California use tax when you
purchase out-of-state items by telephone, Internet,
mail, or in person and both of the following apply:
The seller does not collect California sales or
use tax.
You use, give away, store, or consume the item
in this state.
The California State Board of Equalization (BOE)
administers many different tax and fee programs.
The best known is the sales and use tax program.
Sales tax applies to purchases made within the
state of California. The sales tax counterpart, use
tax, applies to purchases made outside the state
of California. Sales tax is generally due on the
sale of tangible personal property and collected
by merchants in California at the point of sale.
Merchants then remit the sales tax collections
directly to BOE. Use tax is sometimes called
sales tax, but it is a separate tax generally due on
the purchase of tangible personal property from
merchants outside of California.
If you purchase an item, from an out-of-state
merchant, that you use, consume, or store in
California, then you owe use tax. If the out-of-state
merchant charges you the correct amount of sales
or use tax on your purchase, then you fulfilled your
use tax requirement. Out-of-state companies that
are “engaged in business” in California must register
with BOE and collect sales or use tax on their retail
sales of personal property to California customers.
However, if the merchant did not collect sales or use
tax on your purchase, then you must compute and
pay the proper amount of use tax.
In an effort to assist you with your use tax reporting
requirements, the Franchise Tax Board (FTB)
included a use tax line on FTB Forms 540A, 540 2EZ,
and 540, California Resident Income Tax Returns.
This gives you the option to report your use tax
liability on your individual income tax return for outof-state purchases. In addition, the form instructions
include a Use Tax Worksheet and use tax rates to
help you compute the proper use tax liability. New
for 2011, you may use the Estimated Use Tax Table
to estimate and report the use tax due on individual,
nonbusiness items you purchased for less than
$1,000 each. Your other available option is to file
BOE-401-DS, Use Tax Return with BOE.
How do you compute your use tax liability? For your
item purchased from an out-of-state merchant,
multiply the cost by the applicable use tax rate. The
use tax rate and the sales tax rate are the same.
Determine if the out-of-state merchant collected any
sales or use tax and subtract this amount from the
amount of use tax due.
Example 1
(Out-of-state purchase with no use tax collected
by merchant)
Big-screen televison purchase
Cost
Sales/Use Tax Rate (Los Angeles)
$1,000
*.0875
Total Use Tax Liability
$87.50
Example 2
(Out-of-state purchase with use tax collected
by merchant)
Big-screen television purchase
Cost
Sales/Use Tax Rate (Los Angeles)
$1,000
*.0875
Total Use Tax Liability
$87.50
Sales/Use Tax Collected by Merchant $72.50
Total Use Tax Liability
$15.00
In example 1, a taxpayer purchased the big-screen
television from an out-of-state merchant who did
not collect use tax. The taxpayer would report
an $87.50 use tax liability on FTB Form 540,
California Resident Income Tax Return. In example 2,
a taxpayer purchased the big-screen television from
an out-of-state merchant who collected a portion
of the sales or use tax. The taxpayer would report
a $15 use tax liability, the difference between the
amount collected and the amount due on FTB
Form 540, California Resident Income Tax Return.
* We used a sample tax rate in our examples. To find your city
and county sales and use tax rates, go to boe.ca.gov and search
for city and county tax rates.