California – Calculation of Estimated Use Tax Regulation Amended

SALT Report 2571 – The California State Board of Equalization has amended its regulation regarding the calculation of estimated use tax. The amended regulation details the manner in which the BOE will calculate the estimated amount of use tax due according to a person’s adjusted gross income for 2013 and all subsequent years to account for the use tax registration requirements imposed by AB 155. The amended language of regulation 1685.5 is as follows:

“On June 1, 2013, and each June 1 thereafter, the BOE shall calculate the use tax liability factor or use tax table percentage for the current calendar year by multiplying the percentage of income spent on taxable purchases for the preceding calendar year by 0.23, multiplying the product by the average state, local, and district sales and use tax rate, and then rounding the result to the nearest thousandth of a percent.”

The BOE is required to estimate the use tax due based on certain U.S. Census Bureau data and to make those estimates available to the California Franchise Tax Board by July 30 of each year in the form of a use tax table to be included in the FTB’s tax form instructions.

The amendments to regulation 1685.5 are effective July 1, 2013.

For Further Information

California State Board of Equalization – Regulation 1685.5 Calculation of Estimated Use Tax – Use Tax Table