LOS ANGELES, Oct. 12, 2011 /PRNewswire/ -- The California State Board of Equalization (BOE) has adopted Sales and Use Tax Regulation 1685.5, which provides procedures for reporting "estimated use tax." Beginning with the 2011 tax year, individuals may pay an estimated use tax.
Estimated use tax is based on a taxpayer's adjusted income multiplied by a "use tax liability factor" calculated by the BOE each year. For the 2011 calendar year, the factor is .07%. The following chart provides the estimated use tax due based on income.
Adjusted Gross Income (AGI) Range
Use Tax Liability
Less Than $20,000
More than $199,999 - Multiply AGI by 0.070% (.0007)
A taxpayer who pays the estimated use tax is also liable for tax on items purchased for $1,000 or more from non-permitted sellers. Further, a taxpayer who does not pay the estimated use tax owes use tax on all of his or her out-of-state purchases.
The estimated use tax is expected to add an additional $10 million in revenue each year to the state's coffers. California also expanded its definition of nexus for the collection of use tax to include out-of-state sellers with related entities acting on their behalf and sellers who pay California websites to solicit orders of taxable items.
Ryan is a leading global tax services firm, with the largest indirect tax practice in North America and the seventh largest corporate tax practice in the United States. Headquartered in Dallas, Texas, the Firm provides a comprehensive range of state, local, federal, and international tax advisory and consulting services on a multi-jurisdictional basis, including audit defense, tax recovery, credits and incentives, tax process improvement and automation, tax appeals, tax compliance, and strategic planning. In 2010, Ryan received the International Service Excellence Award from the Customer Service Institute of America (CSIA) for its commitment to world-class client service. Empowered by the award-winning myRyan work environment, which is widely recognized as the most innovative in the tax services industry, Ryan's multi-disciplinary team of more than 900 professionals and associates serves many of the world's most prominent Fortune 1000 companies. More information about Ryan can be found at www.ryan.com.