New Registration and Reporting Requirements in California

California has issued a news release and special notice informing taxpayers that the new use tax registration and reporting law requires all “qualified purchasers” to register with the BOE and report and pay use tax. A qualified purchaser is a business that meets all of the following tests: 1) is not required to hold a seller’s permit with the BOE; 2) is not required to be registered or otherwise register with the BOE; 3) is not a holder of a use tax direct payment permit; and 4) receives at least $100,000 in gross receipts per year from business operations. The BOE has identified nearly 200,000 businesses that meet the definition of a “qualified purchaser” and is notifying them of their registration requirement. However, even if a business is not contacted by the BOE, any business that meets the requirement is still responsible for registering with the BOE to report and pay use tax. Under existing law, those businesses who do not meet the $100,000 gross receipts threshold are still required to report and pay use tax; they just do not have the mandatory obligation to register with the BOE for that purpose.

The return for 2009, along with payment, is due by April 15, 2010. The BOE is also asking businesses to report purchases for 2007 and 2008. The new provisions of this bill do not change the due date for use tax liabilities from prior years. Therefore, returns for purchases made in 2007 and 2008 were due January 31, 2008 and January 31, 2009, respectively. Penalty and interest applies to payments received after the due date of each return period. (Special Notice L-232, California State Board of Equalization, September 2009 and News Release 84-09-G, California State Board of Equalization, September 8, 2009)

Posted on September 28, 2009