Businesses must pay ‘use’ taxes, state warns
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More than 180,000 California businesses may owe ‘use’ taxes on goods they purchased over the Internet or the telephone from out-of-state suppliers, the state Board of Equalization is warning.
A new state law requires firms with gross receipts of over $100,000 a year to register with the tax collection agency and pay any use taxes due from the previous year by an April 15 deadline. Firms that take in less than $100,000 do not need to register but must still pay the tax.
The use tax, which has been on the books since 1935, is the same rate as the better-known sales tax. It’s aimed at purchases by individuals and companies from outside the state when the seller does not collect the California sales tax.
The rate, which involves statewide and local taxes applied by cities and counties, varies from a low of 8.25% to a high of 10.75% in the Los Angeles County cities of South Gate and Pico Rivera.
California’s enhanced effort to collect the use tax is expected to increase state revenues by $81 million in the spending year that ends June 30. Use tax returns should jump to an estimated $183 million in fiscal year 2010-11 and $367 million in 2011-12, the board said.
For more information, check out www.boe.ca.gov or call the Taxpayer Information Center at 800-400-7115.
-- Marc Lifsher
