travelin_cat - 7:39 pm on Sep 3, 2009 (gmt 0)

The State of California feels that many businesses purchase supplies and equipment from out of state (computers, mostly) and they are missing out on the sales tax that would have been charged if the merchandise was purchased from a retail store in California.

So, new regulations have come in to play specifically a requirement to file a new form (BOE-400-CSC) and file a sales tax return (Form BOE-401EZ) by 4/15/10 to report your 2009 purchases that did not have sales taxes charged.

The State Board of Equalization has more here:

[boe.ca.gov...]

Here are some details from their FAQ [boe.ca.gov]:

What type of merchandise is subject to use tax? Generally, the same types of items that are subject to sales tax are subject to use tax. Sales and use tax applies to the sale or use of tangible personal property in California. Section 6016 of the Revenue and Taxation Code defines tangible personal property as "personal property which may be seen, weighed, measured, felt, or touched, or which is in any other manner perceptible to the senses."

What is the rate for California use tax? What is the rate for my city? The sales tax and use tax rates are the same. The rate of use tax is determined by where the property will be used, stored or consumed, regardless of where the sale takes place.

What is the difference between sales tax and use tax? The California sales tax is imposed on all California retailers. It applies to all retail sales of tangible personal property in the state. Retailers making sales in the State of California are required to remit the sales tax to the Board of Equalization. The California use tax is imposed on consumers of tangible personal property that is used, consumed, or stored in this state. Use tax applies to purchases from out-of-state vendors that are not required to collect tax on their sales. Use tax also applies to most leases of tangible personal property.

This doesn't mean that everything you pay for is reportable. Services you pay for are excluded as are downloads of computer software. But, for example let's say you buy your anti-virus program over the Internet and download the software onto your computer--not taxable. But, if they send you the CD as well, the entire transaction is taxable. Basically, if you can hold it in your hand then use tax is due.