California's $40-some-billion budget deficit has apparently fueled legislation that puts the Franchise Tax Board under the thumbs of the Board of Equalization. Now, ordinarily, I don't pay a lot of attention to letters that I receive from the state of California. I read a few lines, say to myself, "What the heck are they talking about?" and crumple the paper into a wadded ball for my cats to chase around the house.
Yesterday, one of those letters resurfaced. It said that I was required to register with the Board of Equalization. All businesses that make over $100,000 a year are required to register. Doesn't matter if you're a service business and not a resaler, you're required to register. Because I had not registered, the state of California did it for me; how nice of the state. It also was penalizing me for the years of 2007 and 2008. Except I didn't buy anything in '07 or '08 that qualified for registration of use tax.
Once we got that straightened out, I did end up writing a $24.00 check for 2009. Because this new system makes "qualified persons" subject to filing use tax online prior to filing a tax return. This lets the Board of Equalization butt in and grab the money before the Franchise Tax Board has a chance to get its paws on the dough. Isn't that clever?
What do qualified persons pay use tax on? Anything you buy online that is used in your business and exempted from collection of California state sales tax. This means if you buy, like I did, a ScanSnap scanner from Amazon, you must immediately fork over that use and sales tax to the state. Now, I know some people are probably wondering how the state will know if they ever bought something without paying sales tax. I suppose the state could audit your tax return, see what you're writing off as a depreciable asset and demand a receipt for purchase.
This makes me glad that I'm a touchy feely person. I like to touch my merchandise in person. Ask a sales clerk questions and get dumb answers. Open boxes and get yelled at for doing so. So, I almost never buy a piece of equipment online. But if you do and run a business in California that earns over $100,000 a year, you better register with the Board of Equalization.
Photo: Elizabeth Weintraub
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Certified HAFA Specialist
My Sacramento Real Estate Listings
Elizabeth Weintraub is an author, home buying columnist for The New York Times-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout the four-county Sacramento area. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you. Broker-Associate at Lyon Real Estate. DRE License # 00697006.
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