Vehicles and Vessels: Use Tax
Please read the appendix
if you are registering …
Commercial deep-sea fishing vessels.
Equipment used to produce and harvest agricultural
products or used in commercial timber harvesting.
Contents
Introduction
Overview 1
Who is required to pay California use tax? 1
Exchange of information between states 1
If I am required to pay use tax, how is the tax amount calculated? 1
If I qualify for an exemption, do I need to obtain a use tax clearance? 2
If I did not pay the use tax at DMV, what should I do? 2
Entering into a payment plan with CDTFA 3
Where can I get help? 3
Vehicles and Vessels Transferred to Individuals
Received as a gift 4
Purchased from a family member 5
Involuntary transfer of ownership (court order, inheritance) 5
Dissolution of a corporation, limited liability company, or partnership 5
Purchased or delivered out-of-state 6
Assistance with your questions on out-of-state purchases 7
Vehicles 7
Vessels 7
How to calculate your use tax liability 9
Military personnel 9
Purchased from the U.S. government 9
Private party purchase for out-of-state use, one-trip permit 10
Purchased by a Native American for use on a reservation 10
Vehicles and Vessels Transferred to a Corporation, Limited Liability
Company, or Partnership
Transfers to existing corporations 12
Intercompany transfers 12
Contributions to commencing corporations, limited liability companies, or partnerships 13
Transfers to substantially similar corporations, limited liability companies, or partnerships 13
Involuntary transfer of ownership (court order or repossession) 14
Vehicles and Vessels Transferred into Revocable Living Trusts
Transfers into revocable living trusts 15
Appendix 1
Commercial Deep-Sea Fishing Vessels 16
Appendix 2
Partial Tax Exemption for Qualified Farm Equipment or Timber
Harvesting Equipment and Machinery 17
Appendix 3
Charged the Incorrect Tax Rate on Vehicles and Vessels? 19
Appendix 4
Vehicles and Undocumented Vessels Purchased for Use in Interstate and Foreign Commerce 21
Vessels Used to Transport Persons or Property for Hire—Regulation 1594 21
Electronic Logging Device 22
Sample CDTFA-106, Vehicle/Vessel Use Tax Clearance Request 23
For More Information 25
Regulations, Forms, and Publications 26
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Introduction
Overview
This publication provides examples of vehicle and vessel transfers that are not subject to California use tax.
You will also find instructions on how to apply for a “use tax clearance” issued by the California Department of Tax and Fee
Administration (CDTFA). There are two types of certificates, CDTFA-111, Certificate of Vehicle, Mobilehome or Commercial
Coach Use Tax Clearance and CDTFA-111-B, Certificate of Vessel Use Tax Clearance.
A use tax clearance is a document issued by CDTFA stating that you qualify for a specific exemption and that you may
register your vehicle or vessel without payment of use tax.
This publication addresses only the more common exemptions. If you think you may qualify for an exemption that is not
described here, please call or write CDTFA to discuss your situation (see If I qualify for an exemption, do I need to obtain a
use tax clearance?).
If you purchased a trailer for use in interstate and foreign commerce and think it may be exempt from California use tax,
please review Appendix 4. You may also contact our Consumer Use Tax Section at 1-916-445-9524 prior to obtaining a
Permanent Trailer Identification at the California Department of Motor Vehicles (DMV).
This publication does not apply to documented vessels that are registered with the U.S. Coast Guard. For information
on exemptions for the purchase and use of documented vessels, please refer to publication 40, Watercraft Industry, or
call our Customer Service Center at 1-800-400-7115 (CRS:711). You can also contact our Consumer Use Tax Section at
1-916-445-9524 for more information.
Who is required to pay California use tax?
Unless an exemption applies, either sales or use tax applies to the
purchase of vehicles or vessels for use in California.
If you buy a vehicle or vessel from someone who is engaged in
business in California as a vehicle or vessel dealer, that person is
responsible for reporting and paying sales tax.
However, if you buy a vehicle or vessel—or receive one as
compensation—from someone who is not a California dealer, you
are generally required to pay use tax for the use of the property in
this state.
As explained in this publication, your purchase may qualify for an
exemption and may not be subject to use tax.
Exchange of information between states
CDTFA may forward the documentation from a use tax clearance request (for a vehicle or vessel) to other states, in
accordance with agreements for reciprocal exchange of information between states. Please contact our Consumer Use
Tax Section at 1-916-445-9524 for additional information.
If I am required to pay use tax, how is the tax amount calculated?
The tax rate for use tax is the same as that for sales tax, but it is determined by the address where the vehicle is registered
or the vessel is moored.
1
The use tax is based on the total purchase price of the vehicle or vessel. The total purchase price includes cash, the
payment or assumption of a loan or debt, and the fair market value of any property and/or services traded or exchanged
for the vehicle or vessel.
1
If DMV charges you an incorrect tax rate, see Appendix 3.
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If I qualify for an exemption, do I need to obtain a use tax clearance?
A use tax clearance is a document issued by CDTFA stating that you qualify for a specific exemption and that you may
register your vehicle or vessel without payment of use tax.
DMV can process many nontaxable transfers without requiring that you obtain a use tax clearance from CDTFA. For example,
transfers of vehicles between qualified family members may not require a certificate of use tax clearance.
If you are asked by DMV to obtain a use tax clearance for a vehicle or vessel, follow the procedures listed below. If you
have questions regarding these procedures, please contact CDTFA or DMV.
To avoid penalty charges, be sure to pay your DMV transfer fee on time. The transfer fee must be paid timely, even
if you have not yet received a reply from CDTFA about your request for a use tax clearance. If you apply for a use tax
clearance, DMV will return your registration application to you and ask that you re-submit it to them after you have
received a reply from CDTFA. If CDTFA issues you a CDTFA-111 or a CDTFA-111-B, submit it to DMV along with the
registration application to complete your registration of the vehicle or vessel.
To apply for a use tax clearance, use CDTFA's Online Services and under Limited Access Functions, select Request
Use Tax Clearance for Registration with DMV/HCD. Or, you may submit a CDTFA-106, Vehicle/Vessel Use Tax Clearance
Request to CDTFA.
You may mail, fax, or submit CDTFA-106 to your local CDTFA office or the Consumer Use Tax Section in Sacramento. For a list
of addresses, fax, and telephone numbers for local CDTFA offices, visit our Office Locations and Addresses page.
To mail your application with copies of supporting documentation directly to our Consumer Use Tax Section, please
send them to:
Consumer Use Tax Section MIC:37
California Department of Tax and Fee Administration
PO Box 942879
Sacramento, CA 94279-0037
If your request is approved, CDTFA will issue you a CDTFA-111, Certificate of Vehicle, Mobilehome, or Commercial Coach
Use Tax Clearance for a vehicle or a CDTFA-111-B, Certificate of Vessel Use Tax Clearance, for a vessel. Return your DMV
registration application, along with the original CDTFA-111 or CDTFA-111-B, to DMV. (Make a copy of DMV application
and the use tax clearance certificate for your records.)
Please note: In some cases, CDTFA may ask for additional information before deciding on whether to approve a use
tax clearance request. If you are asked to provide supporting documentation, as indicated in this publication, please
provide photocopies. Please do not send original documents.
If your request is denied, the use tax is due and must be paid to DMV. If you disagree with CDTFA's findings, you must
still pay the tax to DMV. However, you may file a claim for refund with CDTFA, please see publication 117, Filing a Claim
for Refund.
Claims for refund should be sent to:
Audit Determination and Refund Section MIC:39
California Department of Tax and Fee Administration
PO Box 942879
Sacramento, CA 94279-0039
Please contact our Consumer Use Tax Section at 1-916-445-9524 or a local CDTFA office if you have additional questions
regarding denied exemption requests. For other contact options, please visit our How to Contact Us page.
If I did not pay the use tax at DMV, what should I do?
If you did not pay or make your full use tax payment to DMV on your vehicle or undocumented vessel at the time of
registration, you should:
Report and pay the use tax directly to CDTFA on our website at www.cdtfa.ca.gov by selecting the Register button, then
by selecting Pay Use Tax or File an Exemption for a Vehicle, Vessel, Aircraft, or Moblie Home.
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Report your purchases of vehicles or undocumented vessels subject to use tax in person at any of our field offices.
Additionally, CDTFA has two mobile applications for taxpayers to do their business on the go.
To pay online, please have the following information available:
Name and address of both the purchaser and seller
Identification number of the property purchased such as the vehicle’s identification number (VIN), license plate
number, the vessel’s California registration number (CF), or hull identification number (HIN)
Make, model, and year of property
Date of purchase
Total purchase price
Address where the vehicle will be registered or where the undocumented vessel will be routinely moored or stored
Entering into a payment plan with CDTFA
If you are not able to pay the full amount of your use tax to DMV, you may be eligible to make smaller payments by
applying for a payment plan online with CDTFA. If you qualify, you may be able to pay your liability in weekly or monthly
installments. The amount of your payments will generally depend on the amount you owe and your ability to pay. You
can easily apply for a payment plan or find more information by visiting our website and clicking on
Online Services and then Payment Plan.
If your payment plan is approved, CDTFA will issue you a use tax clearance that can be taken to DMV at the time of
registration.
After CDTFA issues the use tax clearance, a bill (Notice of Determination) will be sent to you for the use tax due based on
the total purchase price plus any penalty and interest charges. Interest will continue to accrue on any unpaid tax until
paid in full. However, if you comply with the terms of the payment plan, the 10 percent finality penalty may be relieved
under certain circumstances.
For more information regarding applying for a payment plan with CDTFA, please contact the Tax Collections Bureau at
1-916-309-8150.
Where can I get help?
California Department of Tax and Fee Administration
For general questions regarding use tax exemptions
Please call our Customer Service Center at 1-800-400-7115 (CRS:711).
For questions regarding use tax clearances already filed
If you filed your request (CDTFA-106) you can call your local CDTFA office directly or our Consumer Use Tax Section at
1-916-445-9524 for help.
Department of Motor Vehicles
Please contact your local DMV field office. For a listing of local offices, visit www.dmv.ca.gov.
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Vehicles and Vessels Transferred to Individuals
Received as a gift
If you received a vehicle or vessel as a gift, you are not required to
pay California use tax on that gift.
However, the vehicle or vessel is not considered a gift if:
You paid cash, traded property, provided services, or assumed a
liability in exchange for the vehicle or vessel; or
Your employer gave you the vehicle or vessel as a form of
compensation (for example, a vehicle given to an employee as a
bonus).
Examples of transfers that do not qualify as gifts:
A friend gives you a vehicle and you agree to take over the loan payments. You must pay use tax computed on the
balance of the loan still owed to the lender and any other consideration given to acquire the vehicle.
You are a shareholder and are given a vehicle or vessel by the corporation as a dividend. Use tax applies to the value
reported by the corporation as a dividend on its income tax return.
How to file a request for a use tax clearance (CDTFA-111 or CDTFA-111-B)
In most cases DMV will not ask you to provide a use tax clearance for a gift. However, if DMV does, you must submit a
CDTFA-106, Vehicle/Vessel Use Tax Clearance Request, to CDTFA to request a use tax clearance. If you are registering more
than one vehicle or vessel, you can attach a list to the form. Include copies of the following documentation:
A copy of the certificate of title or the current registration if title is not available.
Include on CDTFA-106 a written statement signed by you indicating that you did not pay for the vehicle or vessel, trade
other property for it, assume a debt in exchange for it, or receive it as a dividend, or compensation from an employer.
Include the vehicle’s identification number (VIN) or license plate number, or the vessel’s California registration number
(CF) or hull identification number (HIN).
If the gift is from an individual, provide a signed, written statement from that person indicating the property was given
to you as a gift. While a notarized statement is preferable, it is not required. The statement must contain the vehicle’s
identification number (VIN), license plate number, vessel’s California registration number (CF), or hull identification
number (HIN) along with the donor’s mailing address and telephone number.
If the donor is a corporation, Limited Liability Company (LLC), partnership, or similar business organization, provide
a copy of the business or corporate minutes from a meeting of the Board of Directors or governing body, showing
authorization of the gift. The minutes should include information that clearly describes the vehicle or vessel, such as
the vehicle’s identification number (VIN) or license plate number, or the vessel’s California registration number (CF),
or hull identification number (HIN). If minutes are not available, a signed statement from an officer/member of the
corporation, limited liability company, partnership will be accepted provided there is an accurate description of the
item and the name of the person receiving the gift is identified as the claimant. A notarized statement is preferable, but
is not required. The statement should also include the donor’s mailing address and telephone number.
If the transfer is to or from a trust, provide copies of the title page and signature or execution pages of the trust, plus
the applicable pages—referring to the vehicle or vessel.
If you received the vehicle or vessel as a gift from a licensed vehicle or vessel dealer, obtain a copy of the bill of sale or
a statement from the dealer stating that the tax will be paid to the state. This document should include the dealer’s
business name and address and California seller’s permit number.
You may be required to provide additional information.
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Purchased from a family member
You are not required to pay use tax on the purchase of a vehicle or vessel from a parent, grandparent, grandchild, child,
spouse, or domestic partner. If you are a minor (under age 18) and purchase a vehicle or vessel from a minor brother or
sister (related to you by blood or adoption), you are not required to pay use tax. Otherwise, tax applies.
Please note: The tax exemption does not apply if:
The vehicle or vessel is purchased from a family member who is a licensed vehicle or vessel dealer in California.
The vehicle or vessel is being transferred from a revocable living trust to a family member who is not a trustee of the trust.
The vehicle or vessel is purchased from a stepparent, step-grandparent, step-grandchild, stepsibling (if both parties are
minors), or stepchild (there must be a legal adoption for these relations to fall under the exemption).
How to file a request for a use tax clearance (CDTFA-111 or CDTFA-111-B)
In most cases, DMV will not ask you to provide a use tax clearance. However, if DMV does, you must request the use tax
clearance from CDTFA by submitting a CDTFA-106, Vehicle/Vessel Use Tax Clearance Request. If you are registering more than
one vehicle or vessel, you can attach a list to the form. Include copies of the following documentation:
Documents that show proof of the relationship (and age if the transfer is between minors), such as a marriage
license, or a Franchise Tax Board tax return showing the parties as spouses, a Certificate of Registration of Domestic
Partnership, a birth certificate, or an adoption certificate.
A copy of the certificate of title or current registration if title is not available.
Involuntary transfer of ownership (court order, inheritance)
If you have assumed ownership as the result of an involuntary transfer of ownership, you are not required to pay use tax on
the transferred vehicle or vessel. An involuntary transfer is one in which you assume ownership of a vehicle or vessel due to
circumstances beyond your control. For example, you may have acquired the vehicle or vessel as the result of a court order, a
property settlement in a divorce, an inheritance from an estate, or the repossession of a vehicle or vessel you sold.
How to file a request for a use tax clearance (CDTFA-111 or CDTFA-111-B)
To file a request for a use tax clearance, submit your completed CDTFA-106, Vehicle/Vessel Use Tax Clearance Request, to
CDTFA. If you are registering more than one vehicle or vessel, you can attach a list to the form.
Include copies of the following documentation:
A copy of the certificate of title or properly endorsed documents from the court or DMV.
Official court property settlement documents or a certificate of repossession. The documents should include
information that clearly describes the vehicle or vessel, such as the vehicle’s identification number (VIN) or license plate
number, or the vessel’s California registration number (CF) or hull identification number (HIN). If they do not provide
adequate information, you may need to obtain additional documentation.
Dissolution of a corporation, limited liability company, or partnership
You may have received a vehicle or vessel as the result of the distribution of assets upon the dissolution of a corporation,
limited liability company, or partnership. If the vehicle or vessel was given to you solely as a liquidation distribution
and no consideration was given for the property (for example, the payment of cash or the assumption of a liability), the
transfer is not subject to use tax.
How to file a request for a use tax clearance (CDTFA-111 or CDTFA-111-B)
To file a request for a use tax clearance, submit your completed CDTFA-106, Vehicle/Vessel Use Tax Clearance Request to
CDTFA. If you are registering more than one vehicle or vessel, you can attach a list to the form.
Include copies of the following documentation:
A copy of the certificate of title or copy of the current registration if title is not available.
Business or corporate minutes from a meeting of the Board of Directors or governing body authorizing the
distribution of assets. The minutes should include information that clearly describes the vehicle or vessel, such as
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the vehicle’s identification number (VIN) or license plate number, or the vessel’s California registration number (CF)
or hull identification number (HIN). If minutes are not available, a signed statement from an officer/member of the
corporation, limited liability company, or partnership will be accepted provided there is an accurate description of
the item and the name of the person receiving the property is identified as the claimant. If the corporation is closely
held, a statement containing the above information, signed by the officers, will suffice. While a notarized statement is
preferable, it is not required.
Dissolution documents, which carry a filing stamp verifying certification by the Secretary of State. The documents
should indicate that the liabilities of the corporation, limited liability company, or partnership have been satisfied.
You may be required to provide additional information.
Purchased or delivered out-of-state
The applicable test period used to establish whether a vehicle or vessel purchased or delivered out-of-state is presumed to
have been purchased for use in this state generally depends upon the purchase date of the vehicle or vessel.
If you purchase a vehicle or vessel outside of California but first functionally used it in California, the exclusion does not
apply and the purchase and use is subject to use tax.
A vehicle or vessel purchased outside of California, first functionally used outside of California, and brought into California
within 12 months from the date of its purchase is also presumed to have been purchased for use in California and subject
to tax if any of the following conditions occur:
Purchased by a California resident as defined in section 516 of the California Vehicle Code
1
, or
In the case of a vehicle, subject to California vehicle registration during the first 12 months of ownership, or
In the case of a vessel, subject to property tax in California during the first 12 months of ownership, or
Used or stored in California for more than one-half of the time during the first 12 months of ownership.
Please note: A California resident is defined to include a closely held corporation or limited liability company if 50 percent
or more of the shares or membership interests are held by members who are residents of California as defined in section
516 of the Vehicle Code.
The four conditions listed above are independent conditions under which the presumption of purchase for use in
California may arise. Only one of the conditions needs to be met for the presumption to apply.
The presumption may be rebutted if the purchaser provides sufficient documentation as evidence to prove the vehicle or
vessel was purchased for use outside California during the first 12 months of ownership. This evidence may include, but is
not limited to, proof of registration of the vehicle or vessel with the proper out-of-state authority; whether the purchaser
had a residence out-of-state; the location that the vehicle or vessel was insured for; the amount of time the vehicle or
vessel was in California; and whether the purchaser’s move to California was voluntary or involuntary.
If a purchaser brings a vehicle or vessel to California during the first 12 months of ownership and provides evidence
that, at the time of the purchase, the purchaser had no intention that the vehicle or vessel would be used in California,
this alone is sufficient to establish that it was purchased for use outside California. For example, a purchaser voluntarily
moving to California within 12 months of the purchase date does not automatically prevent the purchaser from
overcoming the rebuttable presumption. Instead, a voluntary move is one factor to consider, along with all the other facts
and circumstances, when determining whether a vehicle or vessel was purchased for use outside of California.
Please note: If your purchase is subject to tax, you may be eligible to take a credit for sales or use tax paid to another state
at the time you purchased the vehicle. Please provide DMV with a copy of the purchase agreement showing the amount
of sales or use tax you paid to another state. If the tax paid to another state is lower than the use tax due to California, you
will owe the difference. DMV can handle this credit directly.
1
Vehicle Code section 516 provides in part that a “resident” means any person
2
who shows an intent to live or be located in California on more than a
temporary basis. Presence in California for six months or more in any 12-month period creates a rebuttable presumption of residency, as evidenced by
factors including the address where the resident is registered to vote and the location of his or her place of employment or business.
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Assistance with your questions on out-of-state purchases
The Sales and Use Tax Law can be complex, and you are encouraged to put your tax questions in writing. Not only
will that give us more information on which to base our advice to you, it may protect you from owing tax, interest, or
penalties if we should give you erroneous information. Such protection is not provided for advice given to you verbally,
in person, or on the telephone. Requests for written advice can be emailed to the California Department of Tax and Fee
Administration at www.cdtfa.ca.gov/email/ or mailed directly to the local CDTFA office nearest you. For instructions on
how to get your tax questions in writing, please see CDTFA-8, Get It in Writing.
Also, please see Frequently Asked Questions—Use Tax on Purchases of Vehicles, Vessels, and Aircraft.
Vehicles
CDTFA may request any documentation that demonstrates out-of-state delivery and use of the vehicle outside of
California during the applicable test period. Such documentation may include, but is not limited to:
A signed and notarized CDTFA-448, Statement of Delivery Outside California;
A copy of the purchase agreement or contract;
Documents that show delivery outside of California and who contracted for that delivery (buyer or seller);
Documents to show the first functional use outside of California;
Receipts for meals;
Receipts for lodging or campground receipts;
Receipts for fuel;
Receipts for transportation;
Documentation to show the use and location of the vehicle outside of California during the applicable qualifying
period (12 months or 90 days);
Cell phone bills that show the purchaser outside of California during the qualifying period;
Registration or title documents for the vehicle or vessel in another state;
Credit card receipts/bank statements;
Insurance documents which indicate the location and time period of coverage of vehicle; and
Any other documents that would show the location and use of the vehicle outside of California during the qualifying period.
Vessels
Types of documents that should be retained to support your claim that a vessel was not purchased for use in California include:
Mooring receipts;
Service/fuel receipts;
Credit card receipts/bank statements;
Miscellaneous receipts (incidentals, meals, or toll receipts);
A copy of the purchase agreement or contract;
Documents that show delivery outside of California and who contracted for that delivery (buyer or seller);
Documents to show the first functional use outside of California;
Insurance documents which indicate the location and time period of coverage of vessel and its navigational limits;
Receipts for lodging; and
Any other documents showing the location of your vessel during the appropriate test period after purchase.
All documentary evidence must be retained for at least eight years.
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For a purchaser to qualify for this exclusion from use tax, the vehicle or vessel must be delivered to the purchaser outside
of California. Generally, when the vehicle or vessel is delivered to the purchaser or their representative in California, tax
applies. However, if the contract for sale requires the vehicle or vessel to be shipped out of state, and it is shipped out of
state by the facilities of the seller or by delivery to a common carrier, whether hired by the purchaser or seller, then the
sale occurs outside of California and no tax is due. If, however, regardless of the contract, the vehicle or vessel is diverted
to the purchaser or their representative in California, then tax applies. For example, if a purchaser asks a friend or agent to
deliver the property from California to the purchaser himself or herself at an out-of-state location, use tax applies.
For additional information, please refer to Regulation 1620, Interstate and Foreign Commerce.
Limited Exclusion for Vehicles
California law provides a use tax exclusion for vehicles purchased outside California and brought into this state during the
first 12 months of ownership for the exclusive purpose of warranty or repair work provided the vehicle was used or stored
in this state for that purpose for 30 days or less. The 30-day period begins on the date the vehicle enters California and
includes any travel time to and from the repair facility and ends when the vehicle is returned to a point outside the state.
Limited Exclusion for Vessels
A vessel purchased out of state and brought into California during the first 12 months of ownership for the limited
purpose of repair, retrofit, or modification is not presumed to have been purchased for use in California if the purchaser,
or agent of the purchaser, logged no more than 25 hours of sailing
time on that vessel in California for incidental or other use. The
calculation of sailing time logged does not include sailing time
logged after the completion of the vessel’s repair, retrofit, or
modification for the sole purpose of returning or delivering the
vessel to a point outside California.
Effective January 1, 2010, the provision allowing a vessel purchased
out of state to be brought into California during the first 12
months of ownership for the limited purpose of repair, retrofit, or
modification was changed to remove the sailing time limitation and
to provide that the vessel may only enter California for the exclusive
purpose of the repair, retrofit, or modification performed by any
one of the following:
A county licensed repair facility;
A city licensed repair facility;
A city and county licensed repair facility; or
A repair facility located within a county that has no licensing requirement.
Therefore, a vessel that enters California during the first 12 months of ownership for the purpose of repair, retrofit, or
modification performed by an unlicensed repair facility in a county with a licensing requirement will be presumed to have
been purchased for use in California.
Qualifying repair examples:
Mr. Jones brings his boat into California for an engine modification. The repair facility has a business license from the
county of Los Angeles and Mr. Jones delivers his boat to the repairer’s facility. At the repair facility, the engine is modified
to run more efficiently. This repair would qualify for the limited exclusion for vessels.
Mr. Smith sails in a boat he has owned for six months to California for a repair. Mr. Smith uses a repair facility with a
business license from Sacramento County. The licensed facility makes the repair at the marina where Mr. Smith moored
his boat. Although the repair was not made at the repair facility, the repair was made by a repairer who works for a repair
facility and would qualify for the limited use exclusion for vessels.
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Nonqualifying repair example:
Mr. Lee brings a boat to Los Angeles, California to have his brother-in-law make some repairs and modifications to
the boat. Mr. Lee is going to have him add some special lighting and make some other retrofits with more updated
equipment. Mr. Lee’s brother-in-law does handyman work as a side job but he is not associated with a licensed repair
facility. As the retrofits are not made by a licensed repair facility, bringing the vessel into California for this repair/retrofit
would not qualify for the limited use exclusion and the vessel would be considered purchased for use in California and
subject to use tax.
How to calculate your use tax liability
If your purchase is taxable, you may be eligible for a credit for sales or use tax paid to another state when you purchased
the vehicle or vessel. For example, if you properly paid $150 sales or use tax to another state and the California use tax
due is $200, DMV will credit you for the $150 and charge you $50 for the balance of the use tax due. Conversely, if you
paid a $200 sales or use tax payment to another state and the California use tax due is $150, you will not be charged an
amount for California use tax.
Please provide DMV with a copy of the purchase agreement or other document that shows proof of payment and the
amount of sales or use tax paid to the other state.
Please see Frequently Asked Questions—Vehicles, Vessels, and Aircraft.
Military personnel
If a vehicle purchased by an active duty service member is delivered
to or received at a location outside California, sales tax or use tax may
not apply if the service member moved to California, and brought the
vehicle into California, because of an official transfer to the state and
the contract to purchase the vehicle is made before the service member
receives the official transfer orders to California. If the vehicle is purchased
after the service member receives transfer orders, tax applies unless
the vehicle purchased was not intended for use in California. Please see
Purchased or delivered out-of-state—not intended for use in California, for
more details.
Please note: If at the time the contract to purchase the vehicle is made the service member arranges to take delivery of
the vehicle in California, the service member will be considered to have made an independent determination to use the
vehicle in California and tax will apply.
How to file a request for a use tax clearance (CDTFA-111 or CDTFA-111-B)
To file a request for a use tax clearance, submit a CDTFA-106, Vehicle/Vessel Use Tax Clearance Request, to CDTFA. If you are
registering more than one vehicle, you can attach a list to the form. Include copies of the following documentation:
A copy of the certificate of title or the current registration if title is not available;
Purchase contract, showing the date of purchase; and
Your official military transfer orders.
Purchased from the U.S. government
If you purchase a vehicle or vessel from the U.S. government, your purchase may or may not be exempt from California use
tax. Specific conditions must be met in order for the exemption to apply.
Please note: Exemptions that apply to purchases made from the U.S. government do not extend to purchases from the
State of California or local governments, such as cities and counties.
Purchases not subject to tax. If you purchase a vehicle or vessel from a U.S. Marshal as part of a sale ordered by a federal
court, you are not liable for use tax. Likewise, sales made in accordance with the following U.S. Code sections are not
subject to use tax:
United States Code, Title 8, section 1324 (Aliens and Nationality);
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United States Code, Title 19, section 1595a (Custom Duties);
United States Code, Title 21, section 881 (Food and Drugs); and
United States Code, Title 40, section 481(c) (Public Buildings, Property and Works).
Your receipt will usually identify the section under which the property was sold.
Purchases subject to tax. The U.S. government often holds auctions to sell property it has seized as part of a lien
enforcement or as the result of a loan default. For example, the Internal Revenue Service may sell property it has
seized for tax collection purposes (in accordance with Internal Revenue Code, section 6335). The Small Business
Administration may sell property that had been used to secure loans which later defaulted (in accordance with
the Uniform Commercial Code). The federal government may hold an auction to dispose of surplus property (in
accordance with United States Code, Title 40, section 484, “Disposal of Surplus Property”). Sales made in this manner
are subject to use tax unless another exemption applies.
How to file a request for a use tax clearance (CDTFA-111 or CDTFA-111-B)
To file a request for a use tax clearance, submit a CDTFA-106, Vehicle/Vessel Use Tax Clearance Request, to CDTFA. If
you are registering more than one vehicle or vessel, you can attach a list to the form. Include copies of the following
documentation:
Vehicle or vessel transfer documents issued by the U.S. government;
The purchase invoice, which should include information that clearly describes the vehicle or vessel, such as the
vehicle’s identification number (VIN) or license plate number, or the vessel’s California registration number (CF) or hull
identification number (HIN). If the invoice does not provide adequate information, you may need to provide additional
documentation; and
Documentation indicating the authority under which the property was sold (United States Code, Title, and section).
If the purchase invoice shows this authority, no additional documentation is needed. Otherwise, you may need to
request a letter from the federal government verifying the authority. Contact the selling agency or contact the General
Services Administration at 1-844-GSA-4111 for this information.
Private party purchase for out-of-state use, one-trip permit
The purchase of a vehicle from a person in California, who is not required to hold a dealer’s license or a seller’s permit
(private party), is generally subject to use tax at the time the vehicle is registered with DMV. However, a purchaser is not
required to pay California use tax if the only use of the vehicle purchased from a private party in California is to remove
it from the state and it will be used solely thereafter outside this state. This exclusion from use tax requires that no other
use can be made of the vehicle in this state. A One-Trip Permit may be issued by DMV in lieu of registration, for operating
certain vehicles while being moved or operated unladen for one continuous trip from a place within this state to another
place outside this state. This exclusion does not apply to sales tax.
Purchased by a Native American for use on a reservation
The sale of a vehicle or vessel by an off reservation
1
retailer is generally not subject to tax when the vehicle or vessel is
purchased by a Native American
2
who resides on a reservation, and delivery is made to the purchaser on a reservation
and the ownership transfers on the reservation to the Native American.
This exemption also applies to purchases by “Indian organizations” and “Indian couples as defined below:”
“Indian organizations” include Indian tribes and tribal organizations.
Partnerships qualify as “Indian organizations” for California sales and use tax purposes only when all of the
partners are Indians.
Corporations and limited liability companies qualify as Indian organizations only if they are organized under tribal
authority and wholly owned by Indians.
1
Reservation includes reservations, rancherias, and any land held by the United States in trust for any Indian tribe or individual Native American.
2
Indian means any person of Native American descent who is entitled to receive services as a Native American from the United States Department of
the Interior.
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“Indian couples” include a married couple or a registered domestic partnership for exemption purposes when it
consists of two Indians or of an Indian and a non-Indian that have entered into officially recognized family relationships
under California law or tribal law. This generally includes a married couple or a domestic partnership. Tribes have
the authority to establish their own laws and regulations regarding such unions. If either California law or tribal law
recognizes the family relationship, and at least one member of the couple is an Indian, the couple qualifies as an Indian
couple.
Use tax does not apply if a vehicle or vessel is used on a reservation more than one-half of the time during the first 12 months
after it was purchased. A vehicle or vessel is used off a reservation when it is used or stored off a reservation. Use tax, if
due, is payable by the Native American purchaser directly to CDTFA.
Please see publication 146, Sales to Native Americans and Sales on Indian Reservations.
How to file a request for a use tax clearance (CDTFA-111 or CDTFA-111-B)
To file a request for a use tax clearance, submit a CDTFA-106, Vehicle/Vessel Use Tax Clearance Request, to CDTFA. If
you are registering more than one vehicle or vessel, you can attach a list to the form. Include copies of the following
documentation:
A copy of the certificate of title or current registration if title is not available;
Purchase invoice, showing the date you took title of the vehicle or vessel and showing the date and place the vehicle or
vessel was delivered to you; and
Documentation showing you are a Native American residing on a reservation. This may include any one of the
following:
Either a proof-of-residency letter from your Tribal Council, or
Your tribal ID card, or
A letter from the U.S. Department of the Interior to show the purchaser is a Native American.
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Vehicles and Vessels Transferred to a Corporation,
Limited Liability Company, or Partnership
Transfers to existing corporations
The transfer of a vehicle or vessel to an existing corporation is not subject to use tax if the property is transferred to the
corporation for no consideration.
Examples of consideration include cash, credits, shares in the corporation, promissory notes, the fair market value of any
trade (including “even” trades), the cancellation of a debt, or the assumption of a loan.
If the corporation gives consideration for the vehicle or vessel, the transfer is subject to use tax based on the value of the
consideration given.
Intercompany transfers
The transfer of a vehicle or vessel from one corporation or limited liability company (LLC) to another corporation or LLC
for consideration is a sale without regard to whether the entities are related or not. If a subsidiary transfers tangible
personal property for consideration to another subsidiary, or to the parent company (or vice versa), provided that the
subsidiary and parent are separate persons for sales and use tax purposes, it is a sale subject to tax unless otherwise
exempt.
The purchase price subject to tax would include cash, the market value of any property given in trade, the payment or
assumption of a liability, an intercompany debt, the cancellation of indebtedness, the receipt of additional shares or
ownership interests, or any other valuable consideration given by the transferee to the transferor in exchange for the
property.
When one entity carries tangible personal property on its books as an asset, and that property is then transferred to a
related entity, the transfer must be accounted for in some manner in the books of the transferor. The transferee must
also account in its books for the transfer received and the resulting increase in its assets. If this is done by creating an
inter-company debt, for example, the transferor shows a credit due from the transferee and the transferee shows a
corresponding debt owed to the transferor, consideration has been paid. The amount of that consideration is subject to
tax unless the sale and use of the property is otherwise exempt.
“Bargain sales” or donations to a nonprofit organization.
In some cases, a seller will “donate” a portion of the selling price of a vehicle or vessel as a charitable donation for income
tax purposes and ask for consideration, such as cash, for the remaining value of the vehicle or vessel. Use tax is based on
the actual consideration given to the seller—not the donated portion of the selling price.
How to file a request for a use tax clearance (CDTFA-111 or CDTFA-111-B)
To file a request for a use tax clearance, submit a CDTFA-106, Vehicle/Vessel Use Tax Clearance Request, to CDTFA. If
you are transferring more than one vehicle or vessel, you can attach a list to the form. Include copies of the following
documentation:
A copy of the certificate of title or the current registration if title is not available.
A written statement signed by a representative of the company, indicating that the corporation did not pay for the
vehicle or vessel or assume a debt in exchange for it. While a notarized statement is preferable, it is not required. The
statement should contain the vehicle’s identification number (VIN) or license plate number, or the vessel’s California
registration number (CF) or hull identification number (HIN).
A written statement from the donor indicating he or she received no consideration for the property and the
property was not given as part of a contractual agreement. Again, while a notarized statement is preferable, it is not
required. The statement should include information that clearly describes the vehicle or vessel, such as the vehicle’s
identification number (VIN), license plate number, the vessel’s California registration number (CF), or hull identification
number (HIN) along with the donor’s mailing address and telephone number. If the statement does not provide
adequate information, you may need to obtain additional documentation.
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Please note: If the donor is a corporation, limited liability company, partnership, or similar business, it must also provide
documentation showing that the person signing the above written statement is authorized to sign for the donor.
You may be required to provide additional information.
Contributions to commencing corporations, limited liability companies, or
partnerships
If a commencing corporation, limited liability company, or partnership has received a vehicle or vessel solely in exchange
for the first issue of stock in the commencing corporation or for an ownership interest in a commencing limited liability
company or partnership, the transfer is nontaxable. However, if the corporation, limited liability company, or partnership
assumed a liability or paid any other consideration, it must pay use tax based on the liability assumed and any other
consideration given or paid to acquire the vehicle or vessel. A lienholder on the title generally indicates an assumption of
liabilities.
How to file a request for a use tax clearance (CDTFA-111 or CDTFA-111-B)
To file a request for a use tax clearance, submit a CDTFA-106, Vehicle/Vessel Use Tax Clearance Request, to CDTFA. If
you are registering more than one vehicle or vessel, you can attach a list to the form. Include copies of the following
documentation:
A copy of the certificate of title or a copy of the current registration if title is not available;
Corporate minutes or other written document of the commencing corporation, limited liability company, or
partnership authorizing acceptance of the vehicle or vessel in exchange for a first issue of stock or membership or
partnership interest. The document should include information that clearly describes the vehicle or vessel, such as the
vehicle’s identification number (VIN) or license plate number, or the vessel’s California registration number (CF) or hull
identification number (HIN). If the minutes do not provide adequate information, you may need to obtain additional
documentation; and
A written statement by the transferor that the transfer is solely in exchange for stock or membership or partnership
interest in the commencing corporation, limited liability company, or partnership. As stated above, while a notarized
statement is preferable, it is not required.
A copy of the original statement of partnership or articles of incorporation or organization carrying a filing stamp
showing they have been filed as certified by the Secretary of State.
You may be required to provide additional information.
Transfers to substantially similar corporations, limited liability companies, or
partnerships
A transfer of a vehicle or vessel to a similarly owned corporation, limited liability company, or partnership is not subject to
use tax if:
The total property transfer, including the vehicle or vessel, represents at least 80 percent of the property used by the
transferring entity in its business endeavor; and
The real or ultimate ownership of the resulting corporation, limited liability company, or partnership is substantially
similar (80 percent) to the ownership of the corporation, limited liability company, or partnership that transferred the
vehicle or vessel.
The 80 percent threshold is based upon the monetary value of the assets held by the transferring entity, not the number
of assets. Additionally, the vehicle or vessel must have been used by the transferring entity in a business activity in order
for the exemption to apply.
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How to file a request for a use tax clearance (CDTFA-111 or CDTFA-111-B)
To file a request for a use tax clearance, submit a CDTFA-106, Vehicle/Vessel Use Tax Clearance Request, to CDTFA. If
you are registering more than one vehicle or vessel, you can attach a list to the form. Include copies of the following
documentation:
A copy of the certificate of title or a copy of the current registration if title is not available;
Articles of incorporation or organization, statement of partnership, or similar documentation filed with the Secretary of
State;
Proof of previous ownership of the corporation, limited liability company, or partnership and a list of its assets, such as
a recent income tax return with depreciation schedules; and
Corporate stock register or comparable documentation that identifies owners, shareholders, members, or partners and
percentage of ownership.
You may be required to provide additional information.
Involuntary transfer of ownership (court order or repossession)
An “involuntary transfer” is a transfer in which a transferee, because of circumstances beyond the transferee’s control,
assumes ownership. For example, a corporation may receive a vehicle as the result of a court order or the repossession of
a vehicle or vessel previously sold by it.
Use tax does not normally apply if title to the property changes due to an involuntary transfer.
How to file a request for a use tax clearance (CDTFA-111 or CDTFA-111-B)
To file a request for a use tax clearance, submit a CDTFA-106, Vehicle/VesselUse Tax Clearance Request, to CDTFA. If
you are registering more than one vehicle or vessel, you can attach a list to the form. Include copies of the following
documentation:
A copy of the certificate of title or a copy of the current registration if title is not available;
Minutes of the Board of Directors or governing body, showing receipt of the involuntary transfer. If minutes cannot
be provided, a signed letter from the transferee accepting the property will suffice. Either document must contain the
vehicle identification number (VIN) or the vessel‘s California registration number (CF) or hull identification number
(HIN); and
Official court property settlement documents or certificates of repossession. These documents must contain the
vehicle’s identification number (VIN) or license plate number, or the vessel’s California registration number (CF) or hull
identification number (HIN).
You may be required to provide additional information.
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Vehicles and Vessels Transferred Into Revocable Living Trusts
Subject to the conditions listed below, the transfer of a vehicle or vessel into a revocable living trust is not subject to use tax.
Please note: There is no exemption in the law for transfers to irrevocable trusts.
Transfers into revocable living trusts
The transfer of a vehicle or vessel into a revocable trust is not subject to tax if all of the following conditions are met:
The trustees of the living trust have the unrestricted power to revoke the trust;
The transfer does not result in any change in the beneficial ownership of the property (the people who actually use or
benefit from the use of the vehicle or vessel);
The trust provides that upon revocation of the trust, the vehicle or vessel will revert wholly to the transferor; and
The only consideration for the transfer is the assumption by the trust of an existing loan for which the tangible personal
property being transferred is the sole collateral.
How to file a request for a use tax clearance (CDTFA-111 or CDTFA-111-B)
To file a request for a use tax clearance, submit a CDTFA-106, Vehicle/Vessel Use Tax Clearance Request, to CDTFA. If you are
registering more than one vehicle or vessel, you can attach a list to the form. In your request for exemption, be sure to
cover the elements listed above.
Include copies of documentation such as:
The certificate of title or current registration if title is not available;
Certificate of Trust or other proof of existence of the trust, such as copies of the title page and the signature or
execution page;
Sections of the trust relating to transfers of property;
Loan assumption papers; and
Documentation verifying the donor’s relationship to the trust.
You may be required to provide additional information.
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Appendix 1
Commercial Deep-Sea Fishing Vessels
The information in this section applies to vessels that are registered with DMV. It does not apply to vessels that are documented,
or registered, with the U.S. Coast Guard. If you are claiming an exemption for such a vessel, please contact CDTFA's Consumer
Use Tax Section for more information at 1-916-445-9524.
Exempt use of deep-sea fishing vessels
Use tax does not apply to vessels registered with DMV if the vessel is used in commercial deep sea fishing operations
outside the territorial waters of California by a person who is regularly engaged in commercial deep sea fishing. To qualify,
the vessel must be used by persons who are regularly engaged in commercial deep sea fishing and, the vessel itself must
actually be used principally (more than 50 percent) in commercial deep-sea fishing operations outside the territorial
waters of this state, using a test period of 12 consecutive months beginning with the first operational use of the vessel.
To qualify for exemption, you must retain evidence that the vessel was used principally (more than 50 percent of its
activity) in commercial deep-sea fishing operations outside the territorial waters of California and the person claiming the
exemption is a person who is regularly engaged in commercial deep sea fishing.
It shall be reputably presumed that “persons who are regularly engaged in commercial deep sea fishing” do not include
persons who have gross receipts from commercial deep sea fishing operations that total less than $20,000 a year. If the
person purchasing the vessel was not previously engaged in commercial deep sea fishing at the time of purchase then
the first 12-month period after the first functional use of the vessel shall be used to determine the gross receipts. If the
person is already engaged in commercial deep sea fishing operations, the person will not be considered to be regularly
engaged in the business of commercial deep sea fishing unless receipts from commercial deep sea fishing operations
aggregate at least $20,000 during any consecutive 12-month period.
Please note: Tax applies with respect to vessels used in commercial deep sea fishing operations if the vessel is used more
than 50 percent or more of the time within the territorial waters of California, using a test period of 12 consecutive
months beginning with the first operational use of the vessel.
The following are examples of documentation to retain as evidence:
Receipts for commercial sales (fish tickets);
Copies of the individual’s and vessel’s commercial fishing license(s);
Vessel logs showing Loran or GPS (global positioning system) readings
and engine hours;
Copy of income tax return(s); and
Photographs of the entire vessel.
How to file a request for a use tax clearance (CDTFA-111-B)
To file a request for a use tax clearance, submit a CDTFA-106, Vehicle/Vessel Use Tax Clearance Request, to CDTFA. If you are
registering more than one vessel, you can attach a list to the form. In your request, be sure to state the expected primary
usage of the vessel.
If you purchased the vessel from a vessel dealer, include copies of the following documentation with your form:
The Statement of Origin, including the hull identification number (HIN); and
Purchase invoice, showing the vessel’s price and its expected delivery date.
If you purchased the vessel from someone who is not a vessel dealer (a private party, for example), include:
A copy of the bill of sale or purchase invoice showing the vessel’s price and delivery date.
If you are issued a CDTFA-111-B, Certificate of Use Tax Clearance, you must take it to DMV to complete your registration.
CDTFA will contact you approximately one year after issuance of the CDTFA-111-B to obtain records that verify the use of
the vessel qualifies for the exemption. If the use of the vessel does not qualify for the exemption, CDTFA will advise you of
your use tax liability.
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Appendix 2
Partial Tax Exemption for Qualified Farm Equipment and Machinery or Timber
Harvesting Equipment and Machinery
Introduction
The following information applies to the registration of farm equipment and machinery or timber harvesting
equipment and machinery purchased for use in California with the Department of Motor Vehicles (DMV). For more
information please see publication 66, Agricultural Industry, or request a copy from our Customer Service Center at
1-800-400-7115 (CRS:711).
You may be eligible for a partial tax exemption if you purchased farm equipment and machinery or timber harvesting
equipment and machinery that will be used primarily to produce and harvest agricultural products or used in commercial
timber harvesting.
To claim the partial exemption all of the following must apply:
You must be a “qualified person;”
You must purchase qualifying equipment and machinery; and
You must primarily use the equipment and machinery in a
qualifying manner. Some types of equipment and machinery
must be exclusively used to qualify.
To determine whether the partial exemption applies, visit the
websites listed below:
Farm equipment and machinery:
www.cdtfa.ca.gov/sutax/exemptfem.htm
Timber harvesting equipment and machinery:
www.cdtfa.ca.gov/sutax/exemptthar.htm
If you are planning to, or have purchased qualifying equipment and machinery, you will not be required to pay a portion
of the sales and use tax rate.
Effective January 1, 2017, the current partial exemption rate is 5.00 percent.
If your purchase qualifies for the partial tax exemption
You can:
Pay the amount of tax actually due (after claiming the partial exemption) directly to CDTFA; or
Pay the tax—not reduced by the partial exemption—to DMV at the time you register and file a claim for refund with
CDTFA for the overpayment.
If you choose to pay CDTFA directly, in order to register the equipment and machinery with DMV without paying any
additional tax, you must complete a use tax clearance request CDTFA-106, Vehicle/Vessel Use Tax Clearance Request, and
submit it to any CDTFA office. If approved, CDTFA will issue you a certificate of use tax clearance that must be filed with
DMV at the time of registration.
If you choose to pay the tax to DMV, you may file a claim for refund of the partially exempt amount with CDTFA in order to
claim the partial exemption amount. DMV also has special registration procedures for some types of farm equipment and
machinery. Please refer to www.dmv.ca.gov for more information.
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To request a refund or credit for overpaid use tax on qualifying equipment and machinery purchases, you must timely
write a letter or submit a completed CDTFA-101-DMV, Claim for Refund or Credit for Tax Paid to DMV, form with your
supporting documentation to any CDTFA office or to the Consumer Use Tax Section at the following address:
Consumer Use Tax Section MIC:37
California Department of Tax and Fee Administration
PO Box 942879
Sacramento, CA 94279-0037
Generally, you must file a claim for refund or credit no later than three years from the last day of the month following the
close of the reporting period for which the overpayment was made, or six months from the date of payment, whichever
period expires later. After this deadline has passed, we generally cannot refund you for any overpayments regardless of
the reason.
When requesting a refund, provide the following documentation:
A copy of the certificate of title or current registration if title is not available;
A copy of written evidence of being engaged in an industry categorized as one of the required Standard Industrial
Classification codes (for example, a copy of a current income tax return including Schedule F, which shows an
equivalent NAICS Code; or a copy of an employment or service contract);
A copy of the bill of sale or purchase invoice; and
A completed partial exemption certificate supporting the claimed partial exemption.
You may download copies from:
Farm equipment certificate
www.cdtfa.ca.gov/formspubs/cdtfa230d.pdf
Timber harvesting equipment certificate
www.cdtfa.ca.gov/formspubs/cdtfa230h.pdf
If your request is approved, CDTFA will mail you a refund check.
Pay the tax—reduced by the partial exemption—directly to CDTFA and receive a tax clearance from CDTFA to submit
to DMV.
To file a request for a CDTFA-111, Certificate of Vehicle, Mobilehome or Commercial Coach Use Tax Clearance or a
CDTFA-111-B, Certificate of Vessel Use Tax Clearance, you must submit a CDTFA-106, Vehicle/Vessel Use Tax Clearance
Request to CDTFA. If you are registering more than one vehicle, you can attach a list to one single form.
Mail your application (CDTFA-106) with copies of supporting documentation directly to our Consumer Use Tax
Section at:
Consumer Use Tax Section MIC:37
California Department of Tax and Fee Administration
PO Box 942879
Sacramento, CA 94279-0037
In your request, please indicate that you are claiming a partial tax exemption. Include with your request the
documentation listed in the previous section.
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Appendix 3
Charged the Incorrect Tax Rate on Vehicles and Vessels?
Introduction
In California, the sales and use tax rate can vary across cities and counties because they have special tax districts that impose an
additional tax. If you register a vehicle or vessel at DMV to an address within a special tax district, the district tax is included as
part of the total tax collected.
If you purchase a vehicle or vessel through a private-party sale (not at a registered dealer) you are required to register it
with DMV. Typically, DMV will charge use tax on the transaction based upon the address of the location where the vehicle
or vessel is registered. In some cases, the wrong tax rate may be charged when the address is based upon a zip code that
crosses city and county lines.
To verify your tax rate, use our interactive map at https://maps.cdtfa.ca.gov/ and enter the address where the vehicle or
vessel will be registered. Compare this rate to the rate you were charged when you registered the vehicle or vessel. If you
were charged the wrong amount, you may file a claim for refund with CDTFA, please see publication 117, Filing a Claim for
Refund.
California City and County Sales and Use Tax Rates, provides information about errors which can occur when using a zip
code or mailing address to determine a sales tax rate, explains recent tax rate changes, the history of sales and use tax
rates, rates and effective dates of district taxes, and the combined sales, use, and district tax rate in certain cities and
communities in California.
Additionally, some cities have developed a database of addresses available at www.cdtfa.ca.gov/taxes-and-fees/cityaddresses.htm
to assist retailers and consumers in identifying addresses located within the special taxing jurisdictions. In cooperation
with these cities, our website provides links to their address databases. If you have questions about the addresses, you
should contact the cities directly.
Please contact CDTFA's Local Revenue and Allocation Unit at 1-916-324-3000 if you have any question regarding this
information.
Example: You register your car at your home in Fresno County. You live near, but not in, the City of Reedley, which has
a special tax district. Homes in the City of Reedley have the same zip code you do. If the use tax rate charged by DMV
includes the Reedley district tax, you are not liable for that district tax.
If DMV charges you a district tax that you are not liable for, as described above, you have two options.
You can:
Pay the correct tax at a CDTFA office and obtain a tax clearance before you register your vehicle, or
Pay the tax requested by DMV and file a claim for refund for the district tax with CDTFA.
Please see publication 117, Filing a Claim for Refund, or call our Customer Service Center at 1-800-400-7115 (CRS:711) for
assistance.
If you choose to pay your use tax liability directly to CDTFA
You can write to CDTFA's Consumer Use Tax Section or visit a CDTFA office to pay use tax on your vehicle or vessel.
For expedited service, we recommend that you visit a CDTFA office to make your payment or visit our website at
www.cdtfa.ca.gov for all other contact information. Additionally, CDTFA has two mobile applications to make it fast, easy and
convenient for tax and fee payers to do their business and pay their use tax on the go. It’s convenience at your fingertips.
After you have paid the use tax, CDTFA will give you a CDTFA-111 or CDTFA-111-B to submit to DMV when you register
your vehicle or vessel. DMV will not collect use tax since the clearance will indicate that you have already paid your use
tax liability.
Whether you write or visit CDTFA, you need to provide a completed CDTFA-106, Vehicle/Vessel Use Tax Clearance Request. If
you are registering more than one vehicle or vessel, you can attach a list to the form.
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Include copies of documentation which should include, but not limited to:
The certificate of title or current registration if title is not available;
Your property tax statement or assessment showing the physical address and parcel number; or
A utility bill showing your name and address.
If you choose to pay the tax at DMV and then request a refund
You may request a refund from CDTFA by timely writing a letter or submitting a completed CDTFA-101-DMV,
Claim for Refund or Credit for Tax Paid to DMV:
If you submit a letter to CDTFA, please indicate the amount of tax you paid and explain why you are entitled to a refund.
With your request, include copies of the following documentation:
The certificate of title or current registration if the title is not available; and
Your property tax statement or assessment showing the physical address and parcel number (if applicable); and
A utility bill showing your name and address.
Submit your letter or CDTFA-101-DMV, Claim for Refund or Credit for Tax Paid to DMV, and supporting documentation to
any CDTFA office or the Consumer Use Tax Section at:
Consumer Use Tax Section MIC:37
California Department of Tax and Fee Administration
PO Box 942879
Sacramento, CA 94279-0037
Please see publication 117, Filing a Claim for Refund, which includes a CDTFA-101-DMV, Claim for Refund or Credit for Tax
Paid to DMV. For assistance, call our Customer Service Center at 1-800-400-7115 (CRS:711).
Please note: There are time limitations for filing a claim for refund. In general a claim for refund of use tax you paid on a
vehicle or vessel you registered at DMV must be filed no later than three years from the last day of the month following
the close of the reporting period for which the overpayment was made, or six months from the date of overpayment—
whichever period expires later. See publication 17, Appeals Procedures: Sales and Use Taxes and Special Taxes, for more
information.
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Appendix 4
Vehicles and Undocumented Vessels Purchased for Use in Interstate and Foreign
Commerce
The following information applies to the purchase and registration of vehicles (including trailers) or undocumented
vessels that are intended for use in interstate or foreign commerce. If the property is a vehicle, use tax will not apply if
one-half or more of the miles traveled by the vehicle during the six month period immediately following its entry into this
state are commercial miles traveled in interstate or foreign commerce. If the property is a vessel, use tax will not apply if
one-half or more of the nautical miles, traveled by the vessel during the six-month period immediately following its entry
into the state are commercial miles traveled in interstate or foreign commerce.
To support an interstate and foreign commerce exemption, the following documentary evidence must be retained:
1. Verification of delivery outside the State of California;
2. Verification that the first functional use of the vehicle or vessel was outside of California prior to its initial entry into
California. “First functional use” of a commercial vehicle or vessel generally occurs when the vehicle or vessel is first
used to carry cargo or passengers, or when the vehicle or vessel is dispatched to pick up a specific load of cargo or
group of passengers;
3. Documentation that establishes the date the vehicle or vessel initially entered California; and
4. Documentation that validates the location and/or use of the vehicle or vessel from the out-of-state delivery date
through the qualifying period; the date the vehicle/vessel initially entered California and for the subsequent six
months.
If a vehicle or vessel initially enters California deadheaded (without a load or passengers) and not dispatched to pick up a
load of cargo or passengers, the first functional use will be considered to have taken place in California.
Please note: Sailing in part on the high seas while traveling to and from California ports does not, by itself, qualify a vessel
for the exemption. To be considered as a trip in interstate or foreign commerce, the vessel must actually enter another
state or country. The fact that a vessel travels outside of the three mile limit and back into California is not considered to
be interstate or foreign commerce.
Vessels Used to Transport Persons or Property for Hire—Regulation 1594
Use tax also does not apply to undocumented vessels if they are used principally to transport persons or property for hire
from this state to another state or foreign country, or vice-versa.
Under certain conditions, barges, tugboats, ferry boats, and water taxis that operate entirely within the state may qualify
for the exemption. Their principal use must be:
Transporting cargo moving in interstate or foreign commerce;
Towing, or helping to move, vessels used principally to transport passengers or cargoes in interstate or foreign
commerce; or
Water-taxis that are engaged in the transportation of harbor pilots to or from vessels for the purpose of navigating or
aiding those vessels in the completion or commencement of their voyages to or from points outside of California.
To demonstrate the vessel is used to transport people or property for hire, the vessel must usually generate a certain
amount of gross income from this activity during its first 12 months of operation. The annual gross receipts from
such transportation services must be greater than 10 percent of the cost of the watercraft to the purchaser or lessor,
or $25,000, whichever is less (all gross receipts from transporting passengers or property for hire may be included).
If gross income from a vessel you own or lease is less than the required amount, CDTFA will presume that it is not
used to transport people or property for hire, unless you can clearly establish otherwise. Watercraft not used for hired
transportation services do not qualify for the interstate and foreign commerce principal use exemption.
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MAY 2024
Electronic Logging Device
How to file a request for a use tax clearance (CDTFA-111 or CDTFA-111-B)
To file a request for a use tax clearance, submit a CDTFA-106, Vehicle/Vessel Use Tax Clearance Request, to CDTFA. If you
are registering more than one vehicle or vessel please attach a list to the form. The following documentation should be
submitted with your request:
A copy of the certificate of title or certificate of origin
A copy of the purchase agreement or bill of sale
Documents confirming delivery outside of California
Documents confirming the first functional use outside of California, for example, bill of lading or passenger manifest
Driver’s/vessel logs (from the purchase date through the present-day)
*
Receipts for fuel (from the purchase date through the present-day)
Bills of lading, delivery invoices, passenger lists or manifests (from the purchase date through the present-day)
If you are issued a CDTFA-111 or CDTFA-111-B, Certificate of Use Tax Clearance, by CDTFA you must take it to DMV to
complete your registration of the vehicle or vessel with them.
CDTFA will contact you at the end of the qualifying period to obtain additional documentation to support and verify the
use of the vehicle or vessel for interstate or foreign commerce. Additional documentation should include:
Driver’s/vessel log books
*
Bills of lading or invoices
Receipts for fuel
Any other similar documents showing the origin and destination of each load or passenger trip during the first six
months following entry into California
*
Please note: In order to ensure you have adequate documentation to support an exemption claim, you should retain copies of all relevant records for a
minimum of eight years. This includes records of motor carriers and drivers who are required to use an electronic logging device.
MAY 2024
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VEHICLES AND VESSELS: USE TAX
For More Information
For additional information or assistance, please take advantage of the resources listed below.
INTERNET
www.cdtfa.ca.gov
You can visit our website for additional information—such as laws, regulations, forms, publications, industry guides,
and policy manuals—that will help you understand how the law applies to you or your business.
You can also verify seller’s permit numbers and certain CDTFA licenses or accounts on our website
(see Verify a Permit, License, or Account).
Multilingual versions of publications are available on our website at www.cdtfa.ca.gov/formspubs/pubs.htm.
Another good resource—especially for starting businesses—is the California Tax Service Center at www.taxes.ca.gov.
BULLETINS AND NEWSLETTERS
The CDTFA publishes a quarterly Tax Information Bulletin (TIB) and an annual Special Taxes and Fees Newsletter. These
include articles on the application of law to specific types of transactions, announcements regarding new and
revised publications, and other articles of interest. You can find current TIBs and newsletters on our website. You
may also sign up to receive email notifications when new TIBs and newsletters are posted to our website.
FREE CLASSES, SEMINARS AND TUTORIALS
We offer free online seminars and video tutorials for help using our online services system, including how to file
your return. Some classes are offered in multiple languages. If you would like further information on specific
classes, please call our Motor Carrier Office.
WRITTEN TAX ADVICE
For your protection, it is best to get tax advice in writing. You may be relieved of tax, penalty, or interest charges that
are due on a transaction if we determine that we gave you incorrect written advice regarding the transaction and
that you reasonably relied on that advice in failing to pay the proper amount of tax. For this relief to apply, a request
for advice must be in writing, identify the taxpayer to whom the advice applies, and fully describe the facts and
circumstances of the transaction.
For written advice on general tax and fee information, please visit our website at www.cdtfa.ca.gov/email to email
your request.
You may also send your request in a letter. For written advice on use fuel tax questions, send your request to: Program
Administration Branch, MIC:31, California Department of Tax and Fee Administration, P.O. Box 942879, Sacramento,
CA 94279-0031.
TAXPAYERS’ RIGHTS ADVOCATE
If you would like to know more about your rights as a taxpayer or if you have not been able to resolve a problem
through normal channels (for example, by speaking to a supervisor), please see publication 70, Understanding Your
Rights as a California Taxpayer, or contact the Taxpayers’ Rights Advocate Office for help at 1-888-324-2798. Their fax
number is 1-916-323-3319.
If you prefer, you can write to: Taxpayers’ Rights Advocate, MIC:70, California Department of Tax and Fee Administration,
P.O. Box 942879, Sacramento, CA 94279-0070.
QUESTIONS RELATED TO USE FUEL TAX
You may contact our Motor Carrier Office for more information regarding how to complete your use fuel tax return.
Motor Carrier Office. California Department of Tax and Fee Administration, 1030 Riverside Parkway, Suite 125, West
Sacramento CA 95605-1527, Telephone: 1-916-309-0900, Fax: 1-916-373-3070.
CUSTOMER SERVICE CENTER
1-800-400-7115 (CRS:711)
Customer service representatives are available
Monday through Friday from 7:30 a.m. to 5:00 p.m.
(Pacific time), except state holidays. In addition to
English, assistance is available in other languages.
OFFICES
Please visit our website at
www.cdtfa.ca.gov/office-locations.htm
for a complete listing of our office locations. If
you cannot access this page, please contact our
Customer Service Center at 1-800-400-7115 (CRS:711).
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MAY 2024
Regulations, forms, publications, and industry guides
Lists vary by publication
Selected regulations, forms, publications, and industry guides that may interest you are listed below.
Spanish versions of certain publications are also available online.
Regulations
1593 Aircraft and Aircraft Parts
1594 Watercraft
1595 Occasional Sales—Sale of a Business—Business Reorganization
1610 Vehicles, Vessels, and Aircraft
1616 Federal Areas
1620 Interstate and Foreign Commerce
Publications
17 Appeals Procedures: Sales and Use Taxes and Special Taxes and Fees
40 Watercraft Industry
61 Sales and Use Taxes: Exemptions and Exclusions
66 Agricultural Industry
79 Documented Vessels and California Tax
105 District Taxes and Sales Delivered in California
110 California Use Tax Basics
117 Filing a Claim for Refund
123 California Businesses: How to Identify and Report California Use Tax Due
146 Sales to Native Americans and Sales in Indian Country
Forms
CDTFA-101 Claim for Refund or Credit
CDTFA-101-DMV Claim for Refund or Credit for Tax Paid to DMV
CDTFA-106 Vehicle/Vessel Use Tax Clearance Request
MAY 2024
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NOTES
