By Staff Reports
(Victor Valley)– A California State Board of Equalization (BOE)-supported bill that provides an exemption from the state’s use tax requirements for members of the military and their families who purchase goods outside of the state prior to the report date on their transfer orders will take effect January 1, 2014. The use tax exemption provided in Assembly Bill 143 (Holden) will remain in effect through 2018.
“This legislation will ensure members of the Armed Forces aren’t taxed for following orders,” said Board of Equalization Member George Runner. “It’s the least we can do for our brave men and women in uniform.”
Current law exempts active duty service members from paying use tax on vehicles when the purchase is made outside of California, and the use of the vehicle in California is due to a transfer order, and not their own decision. This new law extends the use tax exemption to any other items such as televisions, computers, and clothing that were purchased less than 90 days before the report date on their transfers. Purchases made more than 90 days before the transfer date are not subject to use tax.
Use tax collection has been part of California law since 1935. Purchases for use in California that are made out-of-state, or from an out-of-state online, telephone, or mail-order vendor, are generally subject to use tax if the retailer does not collect the tax that is owed at the rate applicable in the location where the item will be used.
It is easy for consumers to pay the use tax they owe in the space designated for use tax on their state income tax forms. The BOE has developed a use tax table that calculates the use tax liability based upon taxpayers’ adjusted gross income. For purchases of $1,000 or more, the exact amount of use tax owed must be reported and paid.
Elected in November 2010, George Runner represents the State Board of Equalization’s Second District. He is a leading advocate for California taxpayers. Runner has worked to improve California’s tax policies and practices and to create and retain more private sector jobs in our state. Prior to his election to the Board, Runner served twelve years in the State Legislature, authoring the well-known California Amber Alert and California’s Blue Alert. As a thoughtful conservative, his legislative priorities included improving the economy, business growth, education excellence, and public safety for all Californians. As a member of the Senate Revenue and Taxation Committee, Runner consistently led the fight against tax increases and supported tax relief for families and businesses.
The five-member California State Board of Equalization (BOE) is a publicly elected tax board. The BOE collects more than $53.7 billion annually in taxes and fees supporting state and local government services. It hears business tax appeals, acts as the appellate body for franchise and personal income tax appeals, and serves a significant role in the assessment and administration of property taxes. For more information on other taxes and fees in California, visit www.taxes.ca.gov.