Your best holiday shopping deals may just be a click away. But, did you know that for every online purchase you and your fellow Californians make and don’t pay tax, you are missing out on an opportunity to help fund public safety, education, and other vital services in your community?
The Sate Board of Equalization wants you to check your receipts! Sometimes online shoppers are not charged tax on their purchases from out-of-state retailers. When that happens, shoppers very likely owe use tax.
Use tax is owed on taxable items, such as books, electronics, and toys, purchased from out-of-state retailers if these items are used in California. The easiest way to know whether you owe use tax is to review your receipt to see whether you were charged tax. If not, you are most likely responsible for paying use tax. The State Board of Equalization estimates that more than $1 billion in use tax goes unpaid each year. That is enough to pay the full-time salaries of 9,789 police officers, 8,188 firefighters or 13,288 teachers.
It is easy to calculate the use tax you owe and report it on your California state income tax form. Simply find the tax rate for the area in which you live and multiply the purchase price of your taxable items by that rate.
So don’t be Uncle Scrooge this holiday season. Pay your use tax to help keep essential services in your community funded.
The five-member California State Board of Equalization (BOE) is a publicly elected tax board. The BOE collects $60 billion annually in taxes and fees, supporting state and local government services. It hears business tax appeals, acts as the appellate body for franchise and personal income tax appeals, and serves a significant role in the assessment and administration of property taxes. For more information on other taxes and fees in California, visit: www.taxes.ca.gov.