California – BOE Deputy Director’s Report Compliance Program Update (February 11, 2014)

SALT Report 3296 – On February 25, 2014 the California State Board of Equalization heard details regarding the update from the Deputy Director, Jeffrey L. McGuire, on the status of the ongoing compliance efforts by the state of California.  In summary, five programs listed below are returning a cost to benefit ratio of 6:1 for fiscal year 2012/13.

The programs are as follows:

  1. Qualified Purchaser Program – Qualified Purchasers are required to register with the BOE and report all purchases subject to use tax as pursuant to Revenue and Taxation Code section 6225. For FY 2012-13 the program generated $50.4 million in revenue.
  2. Instate Service Business Program – This program uses information from the Employment Development Department to identify specified service businesses that may be purchasing items subject to use tax. For FY 2012-13 the program generated $25.8 million in revenue.
  3. U.S. Customs Program – This program receives U.S. Customs data for California destined purchases on imported items and pursues use tax collection thereof. The program generated $14.7 million in revenue for FY 2012-13.
  4. Agricultural Inspection Station Program – This program created a partnership between the BOE and the California Department of Food and Agriculture (CDFA). As part of the partnership agreement, the BOE receives information from CDFA stations located in Needles, Hornbrook, Truckee and Yermo on trucks entering California. This information is used to issue sales and use tax permits to those that need them, contact taxpayers for outreach and education on use tax, and identify activities that warrant further investigation. During FY 2012-13 the program generated $60.9 million.
  5. Use Tax Educational Outreach Campaign – This campaign is focused on a statewide media/marketing effort to educate taxpayers on the use tax laws to obtain more voluntary compliance. In addition, the campaign includes using third-party data sources to identify individuals that are likely to have purchases subject to use tax and provide them with educational materials, reporting requirements and methods, instructions for the use tax look up table on the Franchise Tax Board income tax return, as well as an individual use tax return for self-reporting their use tax liability. During FY 2012-13, this campaign generated $3.6 million.

For Further Information:

SUTD Deputy Director’s Report Compliance Program Update (February 11, 2014)