California Businesses now required to register with BOE.

by SD Tax Pro

10 04, 2009 | Posted in Our Blog | 0 comments

Background The California legislature recently enacted a new law that requires certain California businesses that do not currently hold a sellers permit to now register with the State Board of Equalization (BOE), and to report and pay by April 15, 2010, any use tax due from purchases made in the preceding year. Currently the BOE is reviewing data from the IRS from 2007 tax returns, and they will be using this information to send letters to businesses with at least $100,000 in business gross receipts.

Information FORM BOE-401-A State, Local, District Sales & Use Tax

Once the taxpayer business receives the BOE letter, the business owner will be asked to verify their contact information, and the BOE will automatically register the business and send them a new account number. If the business fails to respond to the letter; the BOE will automatically register the business. After the BOE has registered the business, the business will be contacted to verify that they reported and paid all required “Use” taxes for tax years 2007, and 2008. All businesses with operations in California who have more than $100,000 in gross business receipts worldwide will be required to register with the BOE. This will include service related businesses.

Alert Action The above does not initially apply to all of my business clients, but a lot of you have asked about going into business, or have found that you have a lot of “free time” so you started a business, or you may have neighbors or friends who have been forced to “go into business”. The BOE estimates that they are “losing” no less than 90 million a year in uncollected taxes, thus the new push.

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