Get Form It-135:2013:sales And Use Tax Report For Purchases Of Items ...

To apply for California tax exemption status, use form FTB 3500, Exemption Application. This is a long detailed form, much like the IRS form 1023.

Tax Exempt Items Food for human consumption. Manufacturing machinery. Raw materials for manufacturing. Utilities and fuel used in manufacturing. Medical devices and services.

Examples: A person buys a vehicle from a dealer in a neighboring state and the dealer does not charge sales tax on the vehicle. The buyer must pay use tax on the purchase price of the vehicle when he/she returns to his/her state and/or city.

In general, businesses which provide a service that does not result in a tangible good are exempt from sales tax, as it only applies to goods. For example a freelance writer or a tradesperson is not required to remit sales tax, although a carpenter making custom furniture is so required.

California's sales tax generally applies to the sale of merchandise, including vehicles, in the state. California's use tax applies to the use, storage, or other consumption of those same kinds of items in the state.

Retail sales of tangible items in California are generally subject to sales tax. Examples include furniture, giftware, toys, antiques and clothing. Some labor services and associated costs are subject to sales tax if they are involved in the creation or manufacturing of new tangible personal property.

States are free to provide exemptions to state and local governments. Not all states provide an exemption for sales to themselves. Government contractors may also qualify for exemptions. States are free to choose whether to tax non-profit organizations and charitable organizations.

Some customers are exempt from paying sales tax under California law. Examples include government agencies, some nonprofit organizations, and merchants purchasing goods for resale. Sellers are required to collect a valid exemption or resale certificate from buyers to validate each exempt transaction.