New "Use" tax law requires qualified purchasers to register with the State Board of Equalization. So beware, big brother is watching.
If you make purchases on the internet and do not pay any sales tax, there is a possibility that you are required to file and pay Use Tax to the California Board of Equalization (BOE). Use tax is not new; only the registration requirement is new.
If you purchased an on-line or out-of-state product and did not pay sales tax, you owe "use tax", which are simply taxes on the purchases delivered to California.
The new law requires "qualified purchasers" to register with the State Board of Equalization if the following conditions apply:
- A person or business receives at least $100,000 in gross receipts from both in-state or out-of-state sales in a calendar year. This includes anyone owning rental property and receives over $100,000 in rental income.
- The person or business does not currently have a seller's permit, certificate of registration for use tax or is not a holder of a use tax direct payment permit.
- The person is not otherwise registered with the BOE (Board of Equalization) to report use tax.
If you meet all of the above conditions, you will need to file Form BOE 401-A or Form BOE 401-EZ. California has made this very easy. You can go on-line to www.boe.ca.gov, click on eServices tab, click on efile Use Tax Return for Qualified Purchasers and follow the directions. Business purchases must file Form BOE 401-A or Form BOE 401-EZ. An individual can file with their individual state tax return, Form 540.
While the state is looking for new revenues to balance the budget, they are currently waiving penalties, but not interest. So Beware...
Cristina Hargett
Alex A. Accetta, CPA & Associates, Inc.
Cristina Hargett
Alex A. Accetta, CPA & Associates, Inc.
