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California Use Tax Supports Vital Community Services

  • Apr 7, 2014 | Gail Cole

 Purchases made through out-of-state vendors may be subject to California use tax.

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.

photo credit: swanksalot via photopin cc

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.