Do You Owe Use Tax?

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(Sacramento, CA)
Friday, April 6, 2007

When you buy something online – or in another state, you might not pay any sales tax.  That’s when you probably owe use tax:   Board of Equalization spokeswoman Anita Gore explains:

“For example if you buy furniture in a state that doesn’t charge you sales tax so you can get a break and decorate your home a little more cheaply, you still owe use tax in CA, because you bought for use here in California.”

But wait, you say – sometimes other states and web retailers do charge tax.  True – but if the rate was lower than it is here, you owe the difference to California.   And that rate varies depending where you live. Gore says the bottom line is:  you’re expected to save your receipts, and pay up.  There’s a line on the state tax form – or you can report directly to the B-O-E.  Gore says last year the state collected about five and a half million dollars in use tax --- but they estimate a billion dollars more goes unreported.