Welcome to the State Board of Equalization

Addressing the Tax Gap

The “tax gap” is the difference between taxes owed and taxes paid to the State of California.  The Sales and Use Tax – the largest tax administered by the Board of Equalization – has an estimated gap of over $2 billion dollars.

In 2007, we implemented a plan designed to reduce the tax gap by improving BOE’s on-going audit and collection programs, collecting use tax from in-state service businesses, and expanding collection on bankruptcy and out-of-state accounts.  Some of our other tax gap programs include:

  • Franchise Tax Board use tax line – provides a line on California income tax returns to report use tax
  • Qualified Purchaser Program – requires service businesses that make at least $100,000 in gross receipts to register with BOE to report use tax
  • Voluntary Disclosure Program – allows taxpayers to come forward to register and pay use tax liabilities  with a shortened look-back period of 3 years
  • Statewide Compliance and Outreach Program (SCOP) – focuses on identifying and registering businesses who are actively selling tangible personal property in California without a seller's permit
We are reviewing ideas for improving these programs as well as ideas for new tax gap efforts. For more information, see:

For questions about the tax gap or to share your ideas, email us at TaxGap@boe.ca.gov