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California: Use Tax Exemption for Active Service Members

  • Oct 15, 2013 | Gail Cole

 Active service members are eligible for an exemption from use tax in California.

use tax on out-of-state purchases since 1935. These days, use applies to purchases made online, by mail order, and by telephone as well as purchases made physically across state lines. Use tax is owed when the retailer “does not collect the tax that is owed at the rate applicable in the location where the item will be used.”

Effective January 1, 2014, use tax will no longer apply to active duty service members and their families on their out-of-state purchases made “prior to the report date on their transfer orders.” This is a result of California State Board of Equalization (BOE). The use tax exemption “will remain in effect through 2018.” (BOE news release).

Under current law, active duty service members are exempt from use tax on vehicles purchased outside of California when the “use of the vehicle in California is due to a transfer order, and not their own decision." Under the new law, this use tax exemption is extended “to any other items such as televisions, computers, and clothing which were purchased less than 90 days before the report date on their transfers. Purchases made more than 90 days before the transfer date are not subject to use tax.”

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.