In-State Voluntary Disclosure Program


Generally, use tax applies when a person or business in California purchases tangible merchandise from a retailer outside of this state that will be used, consumed, given away, or stored in this state and the retailer does not collect California use tax on their sales. As of January 1, 2009, the In-State Voluntary Disclosure Program (Revenue and Taxation Code section 6487.06) allows qualified purchasers within California, who are not otherwise required to hold a seller's permit, to report and pay their use tax liability subject to a three-year statute of limitations.


  • Limits the time the California Department of Tax and Fee Administration (CDTFA) can assess overdue use tax to three years. Without this program, the applicable statutory period is eight years.
  • Allows the CDTFA to waive late filing and late payment penalties.
  • Allows applicants to describe their circumstances and obtain from the CDTFA a written opinion regarding whether the CDTFA might approve their voluntary disclosure request.

Who Qualifies for the In-State Voluntary Disclosure Program?

To qualify for the In-State Voluntary Disclosure Program, all of the following conditions must be met:

  • You reside or are located within California, and not have previously registered with us;
  • You have not previously filed an Individual Use Tax Return with us;
  • You have not reported an amount for use tax on your Individual Income Tax Return filed with the Franchise Tax Board;
  • You are not engaged in business in this state as a retailer, as defined in Revenue and Taxation Code section 6015 (please see publication 107, Do You Need a California Seller's Permit?, for more information);
  • You have not been contacted by the CDTFA for failure to report the use tax imposed by section 6202 of the Revenue and Taxation Code;
  • Your failure to pay the tax or file a return was due to reasonable cause and not as a result of negligence, intentional disregard of the law, or by an intent to evade taxes;
  • Your purchase is not of a vehicle, vessel or aircraft; and
  • You voluntarily come forward to us.

To request an opinion as to whether the CDTFA would approve a voluntary disclosure request or to discuss your eligibility for consideration under the Voluntary Disclosure Program, please contact the Voluntary Disclosure Specialist at the following address:

California Department of Tax and Fee Administration
Voluntary Disclosure Program
PO Box 942879 (MIC: 44)
Sacramento, CA 94279-0044
1-916-322-0187 (fax)
Voluntary Disclosure (e-mail)

Why Take Advantage of the In-State Voluntary Disclosure Program Benefits?

The CDTFA is actively pursuing use tax liabilities from consumers through a variety of programs. Consumers with use tax liabilities are encouraged to take advantage of the benefits available by participating in the In-State Voluntary Disclosure Program before being contacted directly by the CDTFA. Once a person or business is contacted by the CDTFA regarding an unreported use tax liability, that person or business is no longer eligible to participate in the In-State Voluntary Disclosure Program and will not be given the benefit of the three-year statute of limitations and a waiver of penalties.

Who is Liable for California Use Tax Purchases?

Use tax is imposed upon the purchaser. It generally applies to purchases from out-of-state vendors who do not collect California use tax on their sales. Generally, if sales tax would apply when you buy a particular item in California, use tax applies when you make a similar purchase from a business outside the state.

For further information, please see publication 110, California Use Tax Basics. This publication is also available in Spanish (publication 110-S).

Some purchases from out-of-state vendors, however, may not be subject to use tax. The most common use tax exemptions and exclusions are:

  • Purchases of food products.
  • Purchases for resale.
  • Purchase of prescription medicines prescribed by a licensed physician from a pharmacist.
  • You do not use the item in California but instead ship it to a location outside the state for exclusive use there. This is true whether you ship the item by itself or first incorporate it into another product.

How Do You Apply?

After your application has been processed you will receive either an acceptance letter or a denial letter. If you receive a denial letter, it notifies you in writing that you do not meet the requirements for the voluntary disclosure program.

If you receive an acceptance letter, you will be asked to electronically file your tax return(s). You may file and pay your tax return online by accessing online services either by using your Limited Access Code or by using your Username and Password. A Limited Access Code is assigned to you when your registration is approved. For access to full online services account features, such as making changes to your account or filing a return online, you are required to create a Username and Password.

To register for a Username and Password, go to our website and click on Login, scroll down and click View Accounts. You will be directed to the CDTFA Online Services webpage. Create a Username and Password by clicking on Sign Up Now (listed under Create a Username). During the Username and Password registration, you will be prompted to request a security code. The security code will be mailed to you at the mailing address on record within seven to ten (7-10) business days. Once you receive your security code you will return to the CDTFA website and complete the steps above to access your account. If you have not received your security code by the time your return or payment is due, you can use your Limited Access Code to file your return and pay the amount due.

Payment may be made online at the time of filing, or a check can be mailed with your account number and period being paid in the memo line. A printable voucher is available for prepayments made by check, using the Limited Access Code Functions.

Relief of Penalty

To seek relief from penalty charges, a written request must be made, signed under penalty of perjury, which sets forth the facts why the late filing occurred. Form CDTFA-38-I, Application for In-State Voluntary Disclosure, contains a section where the applicant may request relief from penalty.

Potential Disqualification for the Franchise Tax Board (FTB) Voluntary Disclosure Program

The CDTFA online registration has an optional field for a Secretary of State (SOS) number during the completion of the online registration. If you intend to apply for the voluntary disclosure program with the FTB, please note that establishing a SOS registration prior to applying for the FTB program will disqualify you from participating in the voluntary disclosure program with the FTB. Please visit FTB's voluntary disclosure program website for more information.

For more information regarding the CDTFA Voluntary Disclosure Program, see publication 178.