California – Qualified Purchaser Program

SALT Report 1420 – The Board of Equalization approved changes to the Qualified Purchaser Program. These changes may affect your 2011 reporting.
The BOE is closing Qualified Purchaser use tax accounts for all QP’s that have filed three consecutive annual use tax returns reporting $0 purchases subject to use tax. The BOE will notify QP’s prior to the closeout of their account. However, if a QP incurs a use tax liability in the future, they must re-register for a use tax account and file an annual return.
If a QP’s gross receipts from business operations were below $100,000 for the last two consecutive years, the QP is allowed to close out their QP use tax account. This closeout process is not automatic; therefore, QP’s who meet the criteria must contact their local BOE field office. The QP will be required to provide documentation indicating that their gross receipts fell below $100,000 during the past two consecutive years.
After a QP’s use tax account is closed, the QP must re-register for a use tax account and file an annual return if their gross receipts increase to meet the $100,000 threshold and the QP makes purchases subject to use tax. If a QP does not meet the $100,000 gross receipts threshold after the use tax account is closed, the QP may use the BOE form, BOE-401-DS, Use Tax Return, or their Franchise Tax Board income tax return to report any use tax due.
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