Publication 256, Lumber Products and Engineered Wood Products

March 2015

  • Retailers
  • Purchasers
  • Definitions
  • Assessment Table
  • Construction Contractors
  • Additional Information

Beginning January 1, 2013, purchases of lumber products and engineered wood products for use in California are subject to a one percent (1%) assessment based on the selling price of the products. This publication provides information to retailers in applying the assessment to your sales of specific materials, how to properly charge your customer and how to report and pay the Board of Equalization (BOE). This publication also provides information on how to report and pay on purchases of these materials from out of state.

You can report your purchase(s) on our website at www.boe.ca.gov by selecting New Registration, and then select Pay use tax and/or the lumber products assessment on one time purchase. Once you have registered, you may pay any amounts due by filing your return. You can also register to report amounts due in person at any of our field offices.

Retailers of lumber products and engineered wood products are required to:

  • Collect the 1% assessment on sales of lumber products and engineered wood products to California consumers.
  • State the amount of the 1% assessment as a separate item on your sales receipt. The separately stated amount is not subject to sales or use tax. The assessment may be designated on the sales receipt as “lumber products assessment,” “LPA,” “lumber assessment,” “lumber fee,” or “lumber.”
  • File electronically and pay the assessment to the BOE on your sales and use tax return.

Certain retailers are not required to collect the lumber assessment

Effective January 1, 2015, retailers who sell less than $25,000 of qualifying lumber products in a calendar year are not required to collect the lumber products assessment for the subsequent calendar year. If you are not required to collect the lumber products assessment, you must notify your customers that they are responsible for paying the lumber products assessment directly to the BOE. You may inform your customers by printing publication L-403, Lumber Products Assessment Flyer, and providing it to each customer who purchases qualifying lumber products.

However, as a convenience for your customers, you may continue to charge and collect the lumber products assessment on your retail sales of qualifying lumber products and report and pay it to the BOE. The BOE will continue to provide the lumber schedule on your return and no action will be required from you.

If you are not required to charge and collect the lumber products assessment on your retail sales and you do not want to continue to voluntarily collect the assessment from your customer, please contact our Customer Service Center at 1-800-400-7115 so that we can remove the lumber schedule from your account.

Please note: Any amounts collected as lumber products assessment must be reported and paid to the BOE whether you were required to collect the assessment at that time or not.

How to determine if you are required to collect assessment

Each year you will be responsible for determining if you are required to collect the lumber products assessment based on your sales of qualifying lumber products in the prior calendar year. If your sales in the prior calendar year are less than $25,000, you are not required to collect the lumber products assessment in the current calendar year. For example, if your annual sales of qualifying lumber products were less than $25,000 in 2014, you will not be required to collect the lumber products assessment in 2015. However, if your annual sales of lumber are greater than or equal to $25,000 in 2015, you will again be required to collect the lumber products assessment starting January 1, 2016, even if you were not required to collect the assessment in 2015.

Therefore, you should maintain records of your annual lumber sales. This will help you determine whether or not you are required to collect the lumber products assessment in the following year. Keeping a record of your annual sales of lumber is especially important if your annual sales are consistently close to the $25,000 threshold. If you are required to collect the lumber products assessment, and did not collect it from your customers, you are still responsible for the payment of the assessment to the BOE. We may issue you a bill for any unpaid lumber products assessment; less any amounts you can show were reported directly to the BOE by your customers.

Reporting and paying the assessment

Retailers of lumber products and engineered wood products are required by law to electronically report and pay the assessment to us. If you are a lumber retailer that charges and collects the lumber products assessment, your electronic sales and use tax return must include a lumber schedule to report your sales of qualifying lumber products. If you need the lumber schedule added to your electronic return, please contact our Customer Service Center at 1-800-400-7115.

If your account was updated to include the assessment schedule and you are not a retailer of lumber products and engineered wood products, please contact our Customer Service Center at 1-800-400-7115.

Sales not subject to the assessment

In general, the assessment is not due on the following sales:

  • Sales for resale. In a sale for resale, the purchaser is not regarded as purchasing the lumber product or engineered wood product for their own use in this state.
  • Sales in interstate commerce. Sales made by a retailer in California but shipped directly to customers outside of California.
  • Sales to the U.S. government.
  • Sales involving Native American Indians follow the same rules as the sales and use tax law. Please see Regulation 1616, Federal Areas, and publication 146, Sales to American Indians and Sales in Indian Country.

Reimbursement for start-up costs

If you were in business selling lumber products and engineered wood products prior to January 1, 2013, you may offset your reported assessment amounts for certain costs incurred to begin collecting the assessment. You may retain $250 per business location as reimbursement for one-time start-up costs associated with the collection of the assessment. Please see Regulation 2000, Retailer Reimbursement Retention, for guidance on the reimbursable costs.

A business location means a location registered under your seller's permit as of January 1, 2013, where retail sales of lumber products or engineered wood products are made.

Beginning January 1, 2014, lumber retailers that were in business selling lumber products or engineered wood products before January 1, 2013, may retain an additional $485 per business location as reimbursement for their start-up costs. Please see Regulation 2001, Additional Allowed Retailer Reimbursement Retention.

To claim the additional start-up cost, beginning with returns due on or after January 1, 2014, enter your allowable additional reimbursement cost ($485 per business location) on your lumber schedule in the “Reimbursement Cost Offset” box. Remember, you may only enter a reimbursement amount up to your total reported lumber products assessment per each return. Any remaining allowable reimbursement cost must be taken on subsequent returns as an offset to reported lumber products assessment amounts, including any allowable start-ups costs you may have remaining from 2013 ($250 per business location).

If you are eligible for the additional $485 in start-up costs but closed out your business or no longer sell lumber products or engineered wood products subject to the 1% assessment, you may file a claim for refund for lumber products assessment amounts paid in 2013 up to $485 per business location. You may only claim a refund up to the lumber products assessment amounts paid in 2013. You may use a BOE-101, Claim for Refund or Credit, to file a claim for refund (see publication 117, Filing a Claim for Refund).

Note: This publication summarizes the law and applicable regulations in effect when the publication was written, as noted above. However, changes in the law or in regulations may have occurred since that time. If there is a conflict between the text in this publication and the law, decisions will be based on the law and not on this publication.

Purchasers may be required to pay the lumber products assessment directly to the BOE

The one percent (1%) lumber products assessment is imposed on you, as the purchaser of qualified lumber products and engineered wood products for use in this state. For additional information please see, Public Resources Code section 4629.5.

You generally pay the 1% lumber products assessment on your purchases of lumber products and engineered wood products to the retailer. However, effective January 1, 2015, retailers who sell less than $25,000 of lumber products or engineered wood products in the prior calendar year are not required to collect the 1% lumber products assessment from their customers.

If the retailer did not collect the 1% lumber products assessment from you on your purchase of lumber products or engineered wood products that you will use in this state, then you must directly report and pay the lumber products assessment to the BOE.

How to report and pay the lumber products assessment due on your purchase

If you have a seller’s permit or use tax account, you can file and pay the lumber products assessment along with your sales and use tax return online as long as your account has been updated to include the lumber schedule (see Updating your account below).

If you do not have a seller’s permit or use tax account, you can file and pay the lumber products assessment online by visiting our Registration – Main Menu page and selecting the option to Pay use tax and/or the lumber products assessment on one time purchase.

On your small lumber purchase receipts, you can wait until the net combined lumber purchases are $50 or more before reporting and paying the assessment to the BOE.

Please note: A California retailer who does not collect the 1% lumber products assessment will still charge and collect the sales tax from you on your retail purchase of lumber products. Therefore, you are only responsible for paying the 1% lumber products assessment directly to the BOE, not the sales tax.

Updating your account

If you need to add the lumber schedule to your electronic sales and use tax return, please call our Customer Service Center at 1-800-400-7115 or your local BOE field office to update your account to include the lumber schedule.

The Board of Forestry and Fire Protection (BOF) is responsible for determining the products that are subject to the lumber products assessment. See the Board of Forestry, Emergency Regulation to Implement Lumber Products Assessment. The BOF is required to annually update their regulation.

In general, lumber products and engineered wood products subject to the assessment are building products usually used in construction in which wood is at least 10 percent (10%) of the total content. For example, all dimensions and grades of lumber, roofing, (shakes and wooden shingles), siding, lath, plywood, particle board, fiberboard, oriented strand board, I-joists, laminated veneer lumber, veneer-based sheeting material, and inorganic-bonded and wood thermoplastic composites, including plastic lumber and decking, are subject to the assessment.

Based on guidance provided by the BOF the lumber products assessment does not apply to products where labor has added “significant value” to them, such as:

  • Furniture
  • Doors
  • Window
  • Decorative products such as wainscoting, paneling, molding or baseboards that have added profiling, patterns, chamfering, or other craftsmanship

However, the addition of any value to a lumber product does not automatically result in a product not subject to the assessment. Many lumber products undergo additional processing before being used, but are still subject to the assessment; for example, lumber that is graded and planed. In addition, engineered wood products, which are subject to the assessment, have been, by definition, processed or manufactured from raw materials. Thus, it is important to consult the BOF’s Emergency Regulations when trying to determine if a product is subject to the Lumber Products Assessment.

The BOF provides additional information on its website in a document entitled Guidance for classifying products under the Lumber Assessment. This document is intended to provide guidance in determining the products that are subject to the Lumber Products Assessment and does not have the same effect as the law. In instances where there is an inconsistency between the guidance and the law, the law is controlling.


Assessment Table
Subject to Assessment Not Subject to Assessment
Solid Wood Products
Cross-laminated timbers
Decking
Fencing (poles, solid board)
Lath
Lumber
Poles
Railings
Roofing (shakes and wooden shingles)
Siding (beveled shingles, board and batten, log, tongue and grove, treated wood)
Structural panels
Sub-flooring

Engineered Wood Products
Edge-glued material
Fiberboard
Flakeboard
Glue-laminated timber
Hardboard
I-joists
Laminated beams
Laminated strand lumber
Laminated veneer lumber
Oriented strand board
Oriented strand lumber
Parallel strand lumber
Particleboard
Plywood
Veneer-based sheeting material
Waferboard

Inorganic-bonded and wood thermoplastic composites
Cement-bonded composite materials
Ceramic-bonded composite materials
Gypsum-bonded composite materials (fiber reinforced gypsum)
Wood thermoplastic composite materials including plastic lumber and decking
Bark or cork products
Blinds
Brooms
Cabinets
Carvings and craft products
Cooperage and treatment materials (including staves, storage
vessels, and oak chips for wine, beer or sprits)
Doors
Firewood
Frames
Furniture
Indoor finished flooring products such as hardwood (solid or engineered)
Kitchenware
Ladders
Laminate flooring
Lattice
Millwork (window casings, baseboards)
Molding
Musical instruments
Paneling
Paper products
Pre-constructed fencing sections
Pre-constructed railing sections
Pre-fabricated housing
Shutters
Signs
Sporting goods and equipment
Stakes
Tools, tool handles
Trusses
Wainscoting
Windows

The Board of Forestry and Fire Protection (BOF) is required to annually update the regulations pertaining to lumber products and engineered wood products, to identify the types of products subject to the assessment. For more information about products subject to the assessment, visit the BOF website at http://bof.fire.ca.gov.

Construction Contractors

Construction contractors who purchase lumber products and engineered wood products that will be consumed in the performance of a construction contract in California must pay the assessment either to the retailer upon purchase or directly to the BOE.

If you purchase lumber products and engineered wood products for use in California and do not pay the one percent (1%) assessment to a California retailer or you purchase these products from outside of California for use in this state, you are required to report and pay the assessment directly to the BOE.

When you purchase lumber products and engineered wood products for resale, you are responsible for collecting the assessment at the time of sale and reporting and paying the amounts due to the BOE.

If you purchase lumber and engineered wood products to produce items to sell at retail (for example, lumber products to make prefabricated cabinets), you may purchase the products for resale and their purchase is not subject to the assessment.

In addition, the subsequent sale of products that you have manufactured, assembled, processed or produced from the lumber products and engineered wood products is not subject to the assessment (see Definitions and Assessment Table, for products not subject to the assessment).

Purchases from California retailers who are no longer collecting the assessment

Effective January 1, 2015, retailers who sell less than $25,000 of qualifying lumber products in a calendar year are not required to collect the lumber products assessment. If you purchase these products for use in California from a California retailer who does not charge and collect the lumber products assessment, you must pay the 1% assessment directly to the BOE.

If you have a seller’s permit you can file and pay the lumber products assessment on your purchase along with your sales and use tax return online as long as your account has been updated to include the lumber schedule (see Updating Your Account).

If you are not required to hold a seller’s permit or a use tax account, see How to report and pay the lumber products assessment due on your purchase.

Retail sales of lumber products or engineered wood products by contractors

Construction contractors that make retail sales of lumber products or engineered wood products are generally required to charge and collect the lumber products assessment from their customers on their retail sales in this state.

However, effective January 1, 2015, retailers (including construction contractors making retail sales) who sell less than $25,000 of qualifying lumber products in the prior calendar year are not required to collect the lumber products assessment from their customers on their retail sales. Please see Certain retailers are not required to collect the lumber assessment.

How a consumer can pay the one percent (1%) assessment to the BOE

If you are a consumer of lumber products and engineered wood products and do not currently hold a seller’s permit, you may register with us to report and pay the 1% assessment online at our website at www.boe.ca.gov by selecting New Registration, and then selecting Pay use tax and/or the lumber products assessment on one time purchase. Once you have registered, you can pay any use tax or lumber products assessment due by filing your return. You can also register to report use tax or the lumber assessment in person at any of our field offices. Please contact our Customer Service Center for assistance at 1-800-400-7115, or your local BOE office.

For additional information about construction contractors, see publication 9, Construction and Building Contractors.

Please note: Effective January 1, 2015, you are required to pay the assessment directly to the BOE if you purchase qualifying lumber products from California vendors who do not charge and collect the 1% lumber products assessment.

For additional information, go online at www.boe.ca.gov to view information regarding the lumber products and engineered wood products assessment. Or if you have questions regarding the assessment, please call 1-800-400-7115 (TTY:711), Monday through Friday 8:00 a.m. to 5:00 p.m. (Pacific time), excluding state holidays, to speak to a customer service representative.

Regulations
California Code of Regulations, Title 14

1667.1 Authority

1667.2 Timber Regulation and Forest Restoration Fund

1667.3 Definitions

1667.4 Assessed Lumber Products

1667.5 Requests for Review

1667.6 Annual Update of Regulation

California Code of Regulations, Title 18

2000 Retailer Reimbursement Retention

2001Additional Allowed Retailer Reimbursement Retention

Sales and Use Tax Regulation

1616 Federal Areas

Publications

9 Construction and Building Contractors

117 Filing a Claim for Refund

146 Sales to American Indians and Sales in Indian Country

L-403 Lumber Products Assessment Flyer

439 Online Services

Board of Forestry, Additional Information

Guidance for classifying products under the Lumber Assessment (2014)