What type of transactions are generally exempt from California use tax?

In California, the use tax is a consumer tax applied to the sale or use of tangible personal property when sales tax has not been paid. Gifts of vehicles are generally exempt from use tax because they are not considered sales transactions. Since a gift does not involve an exchange of money or consideration, the state does not impose a use tax on the recipient of the vehicle. This means when a vehicle is given as a gift, it falls outside the purview of taxable transactions under California tax law.

In contrast, transactions such as sales to government entities, sales of vintage vehicles, and trade-in transactions can have specific tax regulations associated with them, and they typically involve a form of transfer that aligns with typical sales activities, which may require the assessment of use tax. Therefore, recognizing that a gift is fundamentally different from these kinds of transactions helps clarify why it is exempt.