One of my clients received a letter from the California Board of Equalization:
Our records of your qualified purchaser use tax account indicate that you have filed “zero returns” (no use tax to report) for three consecutive years. Therefore, this letter is to inform you that we are canceling your qualified purchaser use tax account….
My client was required to register for a use tax account as he had gross sales of over $100,000. He buys everything from retailers, so he’s never had a purchase subject to use tax. Yet he’s had to file use tax returns for the last three years.
Not anymore. The BOE has decided that California service businesses that have no purchases subject to use tax for three consecutive years will now not need to file use tax returns. Those returns are due on April 15th…a day tax professionals have something else to worry about.
That said, more and more jurisdictions are beginning to enforce use tax laws. We’re adding a form with our Organizers for 2011 regarding use tax as it’s clear where this is heading. Still, the BOE’s action is a ray of sunshine on the tax front.