California – Use Tax Clearance for DMV Registration

SALT Report 1158 – The California State Board of Equalization has updated their guidance for obtaining a Use Tax Clearance when registering vehicles or vessels with the Department of Motor Vehicles.

Unless exempted, either sales or use tax applies to the purchase of vehicles or vessels used in California.  If you buy a vehicle or vessel from someone who is engaged in business in California as a dealer, that person is responsible for reporting and paying sales tax.  However, if you buy a vehicle or vessel, or have received one as compensation, from someone who is not a California dealer, you are required to pay use tax for the use of the property in California.

The publication discusses the requirements and documentation needed for the two most common certificates issued by the BOE. These certificates are,  BOE-111-Certificate of Vehicle, Mobile Home or Commercial Coach Use Tax Clearance and, BOE-111-B-Certificate of Vessel Use Tax Clearance.

The BOE also offers examples of vehicle and vessel transfers that are not subject to California use tax, instructions on how to apply for a use tax clearance certificate, and information on what to do if a request for use tax clearance is denied.

To apply for a use tax clearance, submit Form BOE-106 – Vehicle/Vessel Use Tax Clearance Request to the BOE.

For Further Information:

California State Board of Equalization Publication 52 – Vehicles and Vessels: How to Request a Use Tax Clearance for DMV Registration