Complying with California Sales Tax

In California as well as most other states, if your business purchases taxable items from an out-of-state vendor, that vendor may not be required to charge you sales tax if they have no presence in California, but that doesn’t mean you don’t have to pay it.  It’s called Use Tax and your company is required to pay it directly to the California Board of Equalization (BOE).  The BOE keeps track of the top non-compliance issues they bust companies for and that one tops the list.

Next in line?

• When you sell taxable goods to another company for resale purposes, you do not have to charge sales tax provided you obtain and retain a resale certificate from the customer.  The second biggest non-compliance issue is selling for resale without the proper supporting documentation.
• When you purchase items for resale, but then remove them from inventory for personal or non-resale use, you are required to pay Use Tax on the purchase cost of those items.  Failure to do so is the third most prevalent noncompliance issue.

For more information and the complete list of the top CA BOE non-compliance issues, click here.