From The California Society of Enrolled Agents: The New Tax Pitfall You Don't Know About

SACRAMENTO, Calif., Feb. 10 /PRNewswire-USNewswire/ -- In July, 2009, the state of California enacted a new Budget trailer bill, ABX 4 18, that introduced new tax filing requirements for the collection of use taxes (taxes that are owed on goods purchased from another state). Especially due to the popularity of Internet purchases and because of the large holes in state revenues during the current economic woes, many states are expending more energy to collect these taxes, but California's new bill goes further than any other efforts to date.

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The new regulation requires a person conducting business as a seller of tangible personal property in this state to obtain a special permit from the State Board of Equalization (BOE) for each place of business and also requires a person selling tangible personal property for storage, use, or other consumption in this state to register with the BOE.

In addition, a qualified purchaser must register with the State Board of Equalization and report and pay the use tax owed for the previous calendar year (along with other taxes owed) by April 15. Note that this bill would not apply to the purchase of a vehicle, vessel, or aircraft.

Because of the new paperwork and new regulatory policies required by these requirements, many businesses and individuals are hustling to ensure compliance, and taxpayers and tax professionals alike are striving to deal with confusion, tax software that doesn't include the new regulations, and contradictory deadlines – although the state will extend the deadline for personal income tax (although not the payment requirements), currently there is no legislation in place for the extension of the use tax requirements.

Efforts are underway to petition the state legislature to allow an automatic six-month (paperless) extension for filing (consistent with state Franchise Tax Board return extensions) and to provide for penalty abatement for businesses who file 2007, 2008, and 2009 use tax returns on or before October 15, 2010. The California Society of Enrolled Agents (CSEA) – which represents thousands of federally-licensed tax professionals, as well as affiliate and associate tax preparers – supports these efforts and has encouraged its Members to contact their local representatives. For more information, contact Sharon Stone Smith of CSEA at 800/777-2732.

Enrolled Agents are licensed by the Department of the Treasury to advise and represent clients specifically in matters of taxation and to help ensure that all deductions and credits are applied accurately and fairly.

You can locate an Enrolled Agent in your area by calling toll free 1-800-TAXPRO-5 or online at www.csea.org. Outside California, the Enrolled Agent referral number is 800/424-4339.

CONTACT: Clifford Weimer or Catherine A. Apker, CAE, both of the California Society of Enrolled Agents, 800/777-2732 or 916/366-6646, or email [email protected].

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David A. Shaw, EA

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SOURCE California Society of Enrolled Agents