Sacramento – Many people are shopping online during the holidays because it’s convenient and it’s easy. But be sure to check those receipts. Sometimes, online shoppers are not charged sales tax on their purchases. When that happens, it’s likely those shoppers owe use tax.
Many of your friends, neighbors, and local businesses already pay use tax, which helps support public safety, education, transportation, and other vital services in your community. The State Board of Equalization (BOE) has made it convenient and easy to pay your use tax on the state income tax return you file with the Franchise Tax Board. You can use the handy look-up table, which shows what you owe based on your adjusted gross income. Or, you can save your receipts and calculate what you owe. Simply find the tax rate for the area in which you live, multiply the purchase price of your taxable items by that rate, and include the tax owed on your income tax return. You may also pay use tax on a one-time purchase directly to the BOE either online or by using our ePay mobile application.
Use tax is owed on any taxable items – such as clothing, electronics, and toys – that are purchased from out-of-state retailers, but used in California. The easiest way to know whether you owe use tax is to review your receipts and see if you were charged tax. The BOE estimates that more than $1 billion in use tax goes unpaid each year, enough to pay the salaries of more than 9,267 police officers, 8,048 firefighters, or 12,951 teachers.
So please do your part this holiday season. Pay your use tax and help fund essential services in your community.
Watch the BOE’s online gift buying video to learn more about use tax.
The five-member California State Board of Equalization (BOE) is a publicly elected tax board. The BOE collects $60.5 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 the California Tax Service Center.
Note: This news release may discuss complex tax laws and concepts. It may not address every situation, and is not considered written advice under Revenue and Taxation Code section 6596. Changes in law or regulations may have occurred since the time this news release was written. If there is a conflict between the text of this news release and the law, decisions will be based upon the law and not this news release. For specific help, please contact the BOE at 1-800-400-7115.
