Use tax is a tax on the use, storage, or other consumption of tangible personal property in California that is not otherwise subject to sales tax. It applies when sales tax would apply if the same item was purchased from a California retailer, but the purchase was made without tax from a business located outside the state. The buyer is required to pay use tax separately for these purchases. The use tax rate in California is 7.25%.

Here are some key points to know about use tax in California:

• Use tax is designed to level the playing field between in-state retailers who are required to collect tax and some out-of-state retailers who are not.
• Use tax, just like sales tax, goes to fund state and local services throughout California.
• Use tax generally applies to foreign purchases of tangible personal property brought into California for storage, use, or other consumption.
• Use tax also applies to purchases of tangible personal property made outside the United States and brought into, or shipped into California for storage, use, or other consumption.
• If you purchase an item from outside of California for use in the city and/or county where you live, you owe use tax on that purchase.
• The sales and use tax rate in a specific California location has three parts: the state tax rate, the local tax rate, and any district tax rate that may be in effect.
• Use tax returns are filed by the buyer or the consumer, whereas sales tax returns are filed by the seller or the business.

If you made purchases for a business use and may owe tax, you can click on the "For Business Use" tab on the California Department of Tax and Fee Administration (CDTFA) website for more information and payment options. If you have not saved your receipts from purchases subject to use tax, you may calculate and pay estimated use tax on your California income tax return based on your income.