State tax collectors in California plan to target businesses that made expensive purchases online to avoid California’s high sales tax rates. The LA Times posted an interesting article about the states latest attempt to increase revenue and you can find a segment from their story below.
Under a law passed over the summer, the state Board of Equalization will send 184,000 letters by the end of the year to service businesses such as law firms, child care companies and Lasik eye surgery centers that have more than $100,000 a year in revenue.
The tax board is looking for out-of-state purchases, especially of expensive equipment, fixtures or software that might be subject to the levy, known as a "use tax."
The notices order the companies to register with the tax board and, by April 15, report and pay tax owed for the last three years or prove why they are exempt.
If the tax board doesn't hear back from a business, the agency will automatically register it in February.