All Businesses With at Least $100,000 Gross Receipts Must Register With the California Board of Equalization


November 2, 2009
By Phillip L. Jelsma

Assembly Bill X4-13 (Stats. 209, CH. 16) requires every business that has at least $100,000 in gross receipts that is not otherwise required to hold a seller’s permit or certificate of registration for use tax, to register with the State Board of Equalization and file a use tax return annually.

California use tax applies when a person or business in California purchases tangible merchandise to be used, consumed, given away or stored in California from a retailer outside of California who does not collect sales tax on the sale. The most common example is an online purchase of tangible personal property from a seller that does not have taxable situs in California.

In an effort to collect use tax from online purchases, all businesses with at least $100,000 of gross receipts from both in state and out of state business operations, must register with the State Board of Equalization by completing Form BOE-404-A, Use Tax Registration.

In addition, each business must file a return for 2009, along with payment, which is due on April 15, 2010. The SBE is also asking registrants to report purchases in 2007 and 2008. The new law does not waive penalties and interest for 2007 or 2008 purchases, but the BOE may grant relief from penalty if it is determined that the failure to file a timely return was due to reasonable cause and circumstances beyond the taxpayer’s control.