There are many tax rules that might puzzle us as to why they are there. One I’d like to see repealed is the use tax exemption that a California resident gets if they bring back up to $800 of taxable goods from outside of the U.S. This exemption can be used every 30 days. The goods must be hand carried back. If they ship them, they owe use tax. If they buy the same goods while traveling in Delaware (where no sales tax would have been charged), they owe California use tax.

The exemption has been around since the 1990s. It is intended to match the federal duty exemption, but it does not match it. There are several special rules in the federal exemption. Also, the purpose of a duty exemption has no relationship to why you might want to have a use tax exemption. I’m not sure why you’d ever want a use tax exemption. Read More