New Look-Up Table
By now, you should have received your tax materials and you are getting ready to file your 2011 personal income tax returns. The Board of Equalization reminds you not to forget to include the “use tax” owed on purchases made from out-of-state online and mail order retailers, or purchased from an out-of-state retailer and brought back into California.
To help make the reporting process more convenient, the BOE, working with the California Franchise Tax Board, has made available an easy-to-read reference guide, the Use Tax Lookup Table (PDF).
The table is also included in the instructions accompanying tax Forms 540, 540A, and 540 2EZ. It provides a simple way to estimate use tax, based on California Adjusted Gross Income, on any number of non-business purchases less than $1,000 each.
What is “use tax”?
In its simplest form, it is tax due on any item bought from an out-of-state retailer that will be “used” in California that if purchased in the state would have been subject to sales tax. Generally, the use tax rate is equal to your local sales tax rate.
While all Californians have an obligation to pay use tax, the revenue it generates for the state and local communities helps to fund important services all Californians enjoy, such as public safety, education, and transportation.
Use tax is not an “internet tax”. It has been on the books since 1935 to protect in-state retailers from the competitive price disadvantage held by out-of-state retailers who do not collect California tax.
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