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Chapter 4: Use Tax
Chapter 4 Use Tax
Allocation or Situs County and City—County and city, other than the residence county and city, where the vehicle/vessel is principally used or kept.
Application for Registration—The original California registration application for any vehicle/vessel.
Application for Transfer—An application for transfer of the:
- Registered owner of a vehicle/vessel presently registered in California on a regular registration basis. For vehicles, this includes conversion from a no title issued (goldenrod) basis.
- Apportioned registration basis where the transferee is applying for full California registration.
Date of Purchase/Date of Sale—The date on which the seller, for consideration, surrenders physical possession of the vehicle/vessel to the buyer or the buyer’s agent.
In this State/In the State—Within the jurisdiction of California.
- Individual, firm, co-partnership, joint venture, association, social club, fraternal organization, corporation, estate, trust, business trust, receiver, assignee for the benefit of creditors, trustee, trustee in bankruptcy, syndicate, the United States, this state, any county, city and county, municipality, or district.
- Other political subdivision of the state.
- Group or combination acting as a unit.
Residence County—The address reflected on or by DMV records unless the owner establishes to DMV’s satisfaction that the place of residence is otherwise (CR&TC §11108).
Retail Sale/Sale at Retail—Any transfer for consideration of the registered ownership of a vehicle or vessel to any person other than a bona fide dealer or dismantler.
Retailer—Any person, other than a dealer or dismantler, making a retail sale of any vehicle or vessel required to be registered under the Vehicle Code (VC).
Sales Price—The total amount paid, as shown on the reverse side of the certificate of title signed by the buyer or a bill of sale. The sales price for a:
- Vehicle/vessel purchased from a manufacturer, out-of-state dealer, or acquired outside the country must be the total consideration/purchase amount in U.S. dollars.
- Cab and chassis, cowl and chassis, or chassis only purchased from other than a licensed California dealer or manufacturer must include the cost of the body, equipment, and other attachments required to complete the vehicle.
The sales price includes:
- The value of any trade-in y manufacturer’s rebate. A rebate is not deducted from the sales price, even if collected directly from the manufacturer by either the consumer or the dealer.
- Transportation charges for shipment from the factory.
- Transportation charges for delivery by the seller when title does not pass to the purchaser until delivery is made.
The sales price should not include:
- State and local taxes or cash discounts such as factory-to-dealer incentives (generally passed on to the selling price, thus reducing the amount subject to tax).
- Insurance premiums or finance charges.
- Registration, license, and other related motor vehicle fees, including document fees.
Storage—Any keeping or retention of personal property in this state for any purpose except for sale in the regular course of business or for subsequent use solely outside this state.
Use—The exercise of any right or power over a vehicle or vessel incidental to its ownership. Vessel use includes any time the vessel is in or on the water, whether operated or stored.
Vehicle (VC §670)—A device by which any person or property may be propelled, moved, or drawn upon a highway. For use tax purposes, this includes an off-highway motor vehicle subject to identification (CR&TC §6272). This does not include a device moved exclusively by human power or used exclusively upon stationary rails or tracks.
Vessel (VC §9840 and CR&TC §6273)—Includes every description of watercraft used or capable of being used as a means of transportation on water, except a:
- Seaplane on the water.
- Watercraft of a type designed to be propelled solely by oars or paddles.
- Watercraft eight feet or less in length of a type designed to be propelled by sail.
- Watercraft specifically designed to operate on a permanently fixed course, the movement of which is restricted to or guided by means of a mechanical device on a fixed track or arm to which the watercraft is attached or by which the watercraft is controlled, or by means of a mechanical device attached to the watercraft itself.
- Floating home designed and built to be used as a stationary waterborne residential dwelling that is tethered to land and with no mode of power. A floating home is dependent on utilities on shore and has a permanent, continuous hookup to a shore-side sewage system.
A vessel includes the motor and all integral component parts of the vessel when in use, including property attached to the structure during use necessary for:
- Navigation and operation of the vessel.
- The comfort and convenience of the passengers and crew.
(Examples: Radio/radar equipment, anchors, lifeboats, built-in bunks, window shades.)
Vessel Agent—Any vessel dealer, manufacturer, or registration service authorized by DMV to accept vessel registration applications and fees.
Vessel Broker—See Yacht and Ship Broker.
Vessel Dealer—For purposes of sales and use tax laws, a person holding a seller’s permit issued by CDTFA who is regularly engaged in the business of selling vessels.
Vessel Manufacturer—For purposes of sales and use tax laws, a person holding a permit issued by CDTFA who is regularly engaged in the business of manufacturing and/or distributing vessels. Vessel/Trailer Combination—Vessel and boat trailer registration applications submitted at the same time.
Yacht and Ship Broker—A person licensed by the California State Parks Division of Boating and Waterways who, for compensation, negotiates the purchase, sale, or exchange of yachts, but does not own such yachts.