Stay up to date with sales tax: Join our mailing list!

Effective July 1, 2004, the sales and use tax rate in Mariposa County, California will be 7.25%, down from 7.75%. Any collections of the MCHA sales or use tax after this date must be returned to the customer or forwarded to the state. Those with contracts specifying the 7.75% should apply the higher rate for property delivered or lease payments received before July 1, 2004 and the 7.25% rate for transactions on or after July 1, 2004. (Special Notice, California State Board of Equalization, May 2004)


As of July 1, 2004, the state sales and use tax rate increases from 6% to 6.25%. However, as part of this approved rate increase, voters also approved a decrease in the local tax rates, therefore leaving the unchanged combined rate of 7.25%. State tax returns and local tax schedules will remain unchanged; changes will only be noticeable if you have sales or purchases that qualify for a partial exemption from sales and use tax. The exemptions include the following: 1) rural investment tax, 2) teleproduction or other post production services, 3) farm equipment and machinery, 4) diesel fuel used in farming activities or food processing, 5) timber harvesting equipment and machinery, and 6) racehorse breeding stock. Therefore, beginning July 1, 2004, the partial tax exemptions will increase from 5% to 5.25%. (Tax Information Bulletin, California State Board of Equalization, June 2004.)


This policy is effective as of January 1, 2004. Any vendor that is offered a contract by California must submit a copy of their seller's permit or certificate of registration. In addition, the vendor must submit the same documentation for any affiliates that make sales into California. The one exception to this policy is that executive directors of the various state departments and agencies can determine that the contract is necessary to meet a 'compelling state interest.' (California Law Sec. 10295.1.)


It is now easier to report use tax in the state of California. A Use Tax line has been added to the California Income Tax Return, allowing taxpayers to report use tax on any purchases made during the tax year on one form rather than having to file a separate use tax return with the Board of Equalization. For more information you may contact the state Board of Equalization's Information Center at 1-800-400-7115 or view the frequently asked questions regarding use tax at (State Board of Equalization, News Release #14-M, March 11, 2004)


Legislators in California, some of whom have historically opposed a sales tax of online purchases, are now rethinking their stance, mostly due to the $35 billion budget gap. This fiscal crisis is one of the worst in the state's history and lawmakers, including Governor Gray Davis, are willing to consider almost any option to take care of the problem. While some companies have been able to avoid collecting online sales tax by using a bricks-and-mortar system, that loophole would be closed with the proposed bill. It was noted that some companies are not waiting for states to decide how they plan to begin collecting the tax. Several companies such as Wal-Mart and Target began voluntarily collecting their own tax for online purchases in return for immunity from owing any back taxes. (San Jose Silicon Valley Chamber of Commerce Annual Power Lunch; Fact Sheet on S.B. 103; Miscellaneous interviews with spokespersons from US Internet Industry Association, Governor Gray Davis, and NCSL.)



Scroll to Top