Signal Tribune Newspaper

Thousands of California businesses must register with the California State Board of Equalization (BOE) to report and pay use tax, the BOE reminded taxpayers Tuesday.
A new use tax registration and reporting law requires qualified purchasers to file returns by April 15 of each year, reporting all purchases subject to use tax from the previous calendar year, beginning with purchases made during 2009.
Beginning in October 2009, the BOE notified 180,000 California businesses by letter that they meet the definition of a qualified purchaser and that they are required to register with the BOE because of a new registration law added to the Revenue and Taxation Code (section 6225) by Assembly Bill x4-18. Even if a business did not receive a letter but meets the criteria of a qualified purchaser, they must register, file returns, and pay any use tax owed.
A qualified purchaser is a business that:
• receives at least $100,000 in gross receipts per year from business operations (including both in-state and out-of-state operations)
• is not required to hold a seller’s permit with the BOE
• is not a holder of a use tax direct payment permit
• is not required to be registered with the BOE
• is not otherwise registered with the BOE to report use tax

As they always have been, businesses who do not meet the $100,000 gross receipts threshold are still required to report and pay use tax but are not required to register with the BOE for that purpose. Persons who have multiple businesses with the same ownership must register if the aggregate gross receipts of those businesses meet or exceed the $100,000 threshold.
Businesses that have no physical presence in California are not required to register.
The use tax, which has been law since 1935, is the same rate for any California location as the sales tax rate. Generally, California use tax is owed when individuals or businesses use, consume, give away or store tangible personal property (products you can see, weigh, feel or touch) in California that was purchased from an out-of-state vendor. If an out-of-state vendor does not collect California tax on your purchase, you must pay the tax.
The effort is estimated to bring in $81 million in 2009-10, $183 million in 2010-11, and $367 million in 2011-12.
The five-member California State Board of Equalization is a publicly elected tax board. The BOE collects more than $53 billion annually in taxes and fees supporting state and local government services. It hears business tax appeals, acts as the appellate body for franchise and personal income tax appeals, and serves a significant role in the assessment and administration of property taxes.

More Information
boe.ca.gov
taxes.ca.gov
1-800-400-7115