An Express Article from the California Land Title Association
New legislation, Assembly Bill x4 18 (Stats. 2009, Ch. 16), added section 6225 of the Revenue and Taxation Code which requires a “qualified purchaser” to register with the Board of Equalization and report and pay use tax directly to the Board of Equalization. Under this section, a “qualified purchaser” includes businesses with at least $100,000 in annual gross receipts from business operations.
If sales tax would apply when a particular item is purchased in California, use tax applies when a similar purchase is made from a retailer outside the state and no tax is charged. Use tax is not a new tax. It has been part of the Revenue and Taxation Code since the 1930’s. Only the registration requirement is new under AB x4 18.
The Board of Equalization has drafted a Special Notice with information regarding the new use tax registration requirements for qualified purchasers, along with a use tax registration form.