For a number of years I have cautioned that if you purchase items on the internet or from catalogs and the seller does not collect California sales tax that you are obligated to pay use tax on those purchases when you file your California income tax return. Most taxpayers have not complied and so the California Franchise Tax Board is become much more aggressive about seeking out those who owe this tax. Following the lead of nine other states (Kansas, Maine, Massachusetts, Michigan, New Jersey, New York, North Carolina, Oklahoma and Vermont) the state has developed a Use Tax Lookup Table.
For a single puchase of $1000 or more, the actual use tax must still be calculated and paid. For cumulative purchases under $1000 taxpayers may pay use tax based on their adjusted gross income. Using the table provides a safe-harbor - the state can't come after you for additional payments. The tax is nominal - $35 on adjusted gross income between $40,000 and $50,000. If you frequently shop online at Amazon or eBay I strongly recommend you use the Lookup Table and pay the use tax.
My tax softwrare will automatically include the use tax on returns but taxpayers wil have the option to have me delete that if they do not purchase items from sellers who do not withhold sales tax.
For a single puchase of $1000 or more, the actual use tax must still be calculated and paid. For cumulative purchases under $1000 taxpayers may pay use tax based on their adjusted gross income. Using the table provides a safe-harbor - the state can't come after you for additional payments. The tax is nominal - $35 on adjusted gross income between $40,000 and $50,000. If you frequently shop online at Amazon or eBay I strongly recommend you use the Lookup Table and pay the use tax.
My tax softwrare will automatically include the use tax on returns but taxpayers wil have the option to have me delete that if they do not purchase items from sellers who do not withhold sales tax.
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