In an attempt to squeeze more revenue out of the businesses which operate in the state of California, The California Board of Equalization has been sending threatening letters out to certain business owners demanding they file "delinquent" Use Tax Returns. These are businesses which are unaccustomed to filing this type of tax return.
If you purchased equipment which was used in the operation of your business for which you did not pay sales tax because you purchased it on the internet or out of state you are subject to use tax - more information on use tax..
Due to recent legislation, any business with gross receipts of $100,000 or more who does not already have a seller's permit with the SBOE are required to register as a "qualified purchaser" and must file use tax returns annually. Since most retail business already have a seller's permit & file sales/use tax returns, this new law primarily affects service businesses (doctors, attorneys, accountants, engineers, etc.) - details re: these new requirements.
If you have questions or have received one of these notices and are not sure how to respond please contact our firm.
