California doesn’t have a tax called an “import tax,” but nearly every foreign purchase that ends up in the state is taxed anyway. The mechanism is use tax, and it mirrors California’s sales tax: a 7.25% statewide base, plus local district taxes that push the combined rate above 10% in many metro areas.1California Department of Tax and Fee Administration. California City and County Sales and Use Tax Rate Information It applies on top of any federal customs duties the U.S. government charges at the border, not instead of them.2U.S. Customs and Border Protection. Duty, Taxes and Other Fees Required to Import Goods Into the United States
How California’s Use Tax Works
Use tax closes a loophole. Buy something at a store in California and the retailer collects sales tax at the register. Buy the same thing from a seller in Tokyo or Toronto and no California sales tax gets collected, because the seller has no obligation to the state. Use tax fills that gap. It applies to any tangible personal property you purchase outside California and then store, use, or consume inside the state.3California Legislative Information. California Revenue and Taxation Code 6201
The rate you pay matches the combined state-and-local sales tax rate where you actually use the item. Two California residents can owe different amounts on the same purchase depending on their addresses. The obligation sits with you, the buyer, which is why many people don’t discover it until they file their income taxes or try to register an imported vehicle.
What Amount Gets Taxed
Use tax is calculated on the purchase price you paid for the goods. Federal import duties, customs fees, and other charges assessed at the border are generally excluded from the taxable amount.4California Department of Tax and Fee Administration. California Use Tax for Foreign Purchases One exception matters: if the foreign seller is the importer of record and rolls the duties into the price you paid, those duties become part of the purchase price and get taxed along with everything else.
Handling charges are taxable. Shipping charges depend on how the delivery is structured. Separately stated shipping via a common carrier or the postal service generally isn’t taxable. Shipping bundled with handling, delivered in the seller’s own vehicle, or padded above the actual cost of transport is another story, and some or all of it can be pulled into the tax base.
The $800 Traveler Exemption
If you personally travel abroad and carry your purchases home in your luggage, the first $800 worth of goods in any 30-day period is exempt from California use tax. The goods must have been bought from a retailer, and you have to hand-carry them into the state yourself.5California Franchise Tax Board. Use Tax Anything you ship or mail back is disqualified, even if you bought it in person at a store overseas.
If your hand-carried purchases exceed $800, use tax applies to the amount above $800. The number to work from is the purchase price listed on your U.S. Customs Declaration, minus the $800 per-person allowance.
Federal Duties Are a Separate Bill
Federal customs duties and California use tax come from two different governments and pay for two different things. U.S. Customs and Border Protection doesn’t collect state taxes; the CDTFA doesn’t collect federal duties.2U.S. Customs and Border Protection. Duty, Taxes and Other Fees Required to Import Goods Into the United States Paying one does not reduce the other. On a single foreign purchase, you can owe both.
CBP also charges a Merchandise Processing Fee on most imports. For formal entries (typically goods valued at $2,500 or more), the fee is 0.3464% of the value, with a minimum and maximum set each fiscal year. Informal entries under $2,500 carry a flat per-shipment fee.6U.S. Customs and Border Protection. Customs User Fee – Merchandise Processing Fees Certain goods, including items subject to anti-dumping or countervailing duties, cannot enter informally regardless of value.7U.S. Customs and Border Protection. Filing an Informal Entry for Goods That Are Less Than $2,500 in Value
One important change on the federal side: for years, packages valued under $800 entered the country duty-free under the de minimis rule at 19 U.S.C. § 1321.8Office of the Law Revision Counsel. 19 US Code 1321 – Administrative Exemptions A 2026 executive action suspended that duty-free treatment for shipments from all countries.9The White House. Continuing the Suspension of Duty-Free De Minimis Treatment for All Countries Small overseas orders that used to slip through without any federal charge now face duties, and California use tax was always owed on them regardless.
When the Marketplace Collects It for You
If you buy from a foreign seller through Amazon, eBay, Etsy, or a similar platform, the marketplace has probably already added California use tax to your order. Since October 2019, California treats marketplace facilitators as the retailer for tax purposes and holds the platform responsible for collecting and remitting the tax on facilitated sales.10California Legislative Information. California Revenue and Taxation Code 6041 It doesn’t matter whether the actual seller is in Shenzhen or Stuttgart.
Direct purchases from a foreign retailer’s own website are different. No marketplace facilitator law applies, and you owe the use tax yourself. The same is true for buying from a foreign brick-and-mortar store, an overseas auction house outside the major platforms, or a seller on social media.
How to Report and Pay Use Tax
Personal purchases can be reported two ways. The easier route is your California state income tax return. On Form 540 or Form 540 2EZ, you enter your total use tax owed on the designated line and pay it with your regular return. For purchases under $1,000 each, the CDTFA publishes a Use Tax Lookup Table that estimates your liability based on adjusted gross income, so you don’t have to save every receipt.11California Department of Tax and Fee Administration. California Use Tax for Personal Use
The other route is paying the CDTFA directly, and for some items it’s mandatory. Vehicles, vessels, aircraft, mobile homes, and cigarettes and tobacco products cannot be reported on your income tax return.11California Department of Tax and Fee Administration. California Use Tax for Personal Use Anyone with a CDTFA consumer use tax account also has to report directly. The deadline for use tax on personal purchases is April 15 of the year after you bought the item.
Vehicles, Vessels, and Aircraft
Bringing a foreign vehicle into California is a two-step process. First, the vehicle has to clear federal requirements under the Imported Vehicle Safety Compliance Act and the Clean Air Act. Nonconforming vehicles must be brought into compliance, exported, or destroyed.12U.S. Customs and Border Protection. Importing a Motor Vehicle
Then California’s DMV collects the use tax at registration. The DMV will not register a vehicle without either payment of the tax or a CDTFA clearance form.13California Department of Motor Vehicles. Vehicle Industry Registration Procedures Manual – 4.040 Transactions Subject to Use Tax Vessels and aircraft work the same way. Anyone who registers a vehicle, vessel, or aircraft outside California to avoid paying use tax faces a 50% penalty on top of the tax itself.14California Department of Tax and Fee Administration. Interest, Penalties, and Collection Cost Recovery Fee
Alcohol and Tobacco
Alcohol and tobacco imports carry use tax, state excise taxes, and volume limits. Adults arriving in California by plane or ship from a foreign country can bring up to 60 liters of alcohol (about five cases) for personal use. Residents crossing the Mexican border by car or on foot are limited to one liter every 31 days, which matches the federal duty-free allowance.15California Department of Alcoholic Beverage Control. Importing Alcoholic Beverages for Personal or Household Use
On top of use tax, California charges volume-based excise taxes on beer, wine, sparkling wine, and distilled spirits, and separate excise taxes on cigarettes (per cigarette) and other tobacco products (as a percentage of wholesale cost).16California Department of Tax and Fee Administration. Tax Rates – Special Taxes and Fees Businesses that import alcohol or tobacco commercially need specific CDTFA licenses before any inventory enters the state. Use tax on cigarettes and tobacco has to be paid directly to the CDTFA, not through an income tax return.
Buying Foreign Goods for Resale
If you hold a valid California seller’s permit and you’re importing goods to resell to customers, you don’t owe use tax on the purchase. You give the foreign supplier a resale certificate, and when it’s issued and accepted in good faith, no tax is due on that transaction. The certificate stays valid until you revoke it in writing.17Legal Information Institute. California Code of Regulations Title 18 Section 1668 – Sales for Resale The exemption applies only to inventory intended for resale. The moment you pull an item off the shelf for personal or internal business use, use tax becomes due on it. Goods a business imports for its own operations, like office equipment, machinery, or supplies, are fully taxable and get reported on the business’s regular sales and use tax return.
Penalties for Skipping Use Tax
Not paying use tax is a bet that gets expensive when it loses. The CDTFA stacks penalties on top of the original tax:
- A 10% penalty for late payment.
- A 10% penalty for failing to file a return.
- A 10% penalty if the underpayment resulted from negligence or intentional disregard of the rules.
- A 25% penalty for fraud or evasion, with possible criminal prosecution.
- A 50% penalty for registering a vehicle, vessel, or aircraft outside California to avoid the tax.
Interest also accrues, tied to the IRS underpayment rate plus three percentage points and calculated monthly from the original due date.14California Department of Tax and Fee Administration. Interest, Penalties, and Collection Cost Recovery Fee The total penalty on a single return is generally capped at 10% of the tax owed, with the fraud and vehicle evasion penalties sitting outside that cap. On a $20,000 foreign purchase that goes unreported and surfaces years later in an audit, penalties and interest together can approach the size of the tax itself.