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February 28, 2012 > Convenient way to report use tax

Convenient way to report use tax

New look-up table makes estimating easy

Submitted By Jaime Garza

Most Californians have received their tax materials and are preparing to file their 2011 personal income tax returns. The Board of Equalization (BOE) wants to remind taxpayers not to forget to include the "use tax" they owe on purchases from out-of-state online and mail-order retailers or purchased from an out-of-state retailer and brought back into California.

To make the reporting process more convenient, the BOE, working with the California Franchise Tax Board, has made available an easy-to-read reference guide, the Use Tax Look-Up Table. Californians will find the table included in the instructions that accompany tax Forms 540, 540A, and 540 2EZ and on the BOE website at www.boe.ca.gov/pdf/2011UseTaxTable.pdf. It is a simple way to estimate use tax, based on California Adjusted Gross Income, on any number of non-business purchases less than $1,000 each.

In its simplest form, "use tax" is tax due on any item bought from an out-of-state retailer for "use" in California and, had it been purchased in California, would have been subject to sales tax. Generally, the use tax rate is equal to your local sales tax rate.

While all Californians have an obligation to pay use tax, the revenue it generates for the state and local communities helps to fund important services all Californians enjoy, such as public safety, education and transportation.

Use tax is not an "internet tax." It has been on the books since 1935 to protect in-state retailers from the competitive price disadvantage held by out-of-state retailers who do not collect California tax.

The Use Tax Look-Up Table is estimated to bring in $10.6M annually, and is an important tool to help close California's $1.1 billion use tax gap.

For more information on sales and use tax rates, visit www.boe.ca.gov or call 800-400-7115.


Use Tax Look-Up Table

CA Adjusted Gross Income (AGI) Range
Use Tax Liability

Less Than $20,000
$7
$20,000 to $39,999
$21
$40,000 to $59,999
$35
$60,000 to $79,999
$49
$80,000 to $99,999
$63
$100,000 to $149,999
$88
$150,000 to $199,999
$123
More Than $199,999
Multiply AGI by 0.070% (0.0007)

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