California Use Tax Supports Vital Community Services
- Apr 7, 2014 | Gail Cole
The California State Board of Equalization (BOE) is determined to increase use tax compliance. For months, it has been reminding taxpayers of their use tax obligation and noted that payment is easy: use tax can be reported on state income tax returns.
Use tax is owed when sales tax is not collected on the transfer of taxable tangible goods and services. This most typically occurs when the seller is located in another state and is not obligated to collect sales tax, as with certain online and catalog vendors. Use tax may also be owed on purchases made out of state, if the item was purchased for use or storage in the state of California.
Earlier this year the BOE revealed that uncollected use tax revenue could, if paid, fund the salaries of approximately 11,000 teachers, or 7,000 police officers, or 6,000 firefighters. Those figures are repeated on the latest BOE news release, “Use Tax Helps Support Vital Community Services.” Also included are links to helpful BOE web pages, such as a video on how to use the use tax table.
In California as in other states, it is becoming increasingly difficult to ignore the existence of use tax and the obligation to pay it. Both individuals and businesses are required to remit use tax; however, businesses that ignore it face a greater audit risk.
Learn more about an affordable and scalable answer to consumer use tax compliance.