Vehicle Industry Registration Procedures Manual

Driver Education illustration

Section 5 of 38

Chapter 4: Use Tax

4.015 Credit for Tax Paid to Another State

An applicant who purchases a vehicle/vessel out of state may receive credit towards the California use tax due for sales/use tax paid to another state, political subdivision, or the District of Columbia prior to entering California. The tax credit should not exceed the California tax that is due.

Credit is not given for taxes paid to foreign countries and territories of the United States, such as Guam or Puerto Rico.

The following must be submitted:

  • A completed REG 256 for credit of tax paid to another state. If the applicant:
    • Cannot certify that tax was paid to another state, process the application as outlined in the Transactions Subject to Use Tax in this chapter.
    • Did not pay tax to another state or does not want to apply for a tax credit, collect the use tax due in the usual manner.

Collect the use tax due after deducting the credit amount from the calculated amount. The tax credit cannot exceed the California use tax due.