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In-State Voluntary Disclosure
Generally, use tax applies when a person or business in California
purchases tangible merchandise from a retailer outside
of this state that will be used, consumed, given away,
or stored in this state. From January 1, 2004, through
January 1, 2006, the In-State Voluntary Disclosure Program
(Revenue and Taxation Code section 6487.06) allowed qualified
purchasers within California who were not otherwise required
to hold a seller's permit to report and pay their use tax
liability with a three-year statute of limitations. Passage
of Assembly Bill 671 (Chapter 308; Statutes of 2005) amended
section 6487.06 to extend the previous sunset date of the
program from January 1, 2006 to January 1, 2008.
Benefits
- Limits the time the Board can make an assessment for
prior use tax to three years. Without this section, the
applicable statutory period would be a maximum of ten years.
- Allows us to waive late filing and late payment penalties.
- Allows applicants to describe their
circumstances anonymously and obtain from us a written
opinion regarding whether we might approve their voluntary
disclosure request.
Who Qualifies for the In-State Voluntary Disclosure
Program?
To qualify for In-State Voluntary Disclosure Program,
all of the following conditions must be met:
- You reside or are located within California, and not
have previously registered with us;
- You have not previously filed an Individual Use Tax Return
with us;
- You are not engaged in business in this state as a retailer,
as defined in Revenue and Taxation Code section 6015;
- You have not been contacted by the Board for failure
to report the use tax imposed by section 6202 of the Revenue
and Taxation Code;
- Your purchase is not of a vehicle, vessel or aircraft;
and
- You voluntarily come forward to us.
Who is Liable for California
Use Tax Purchases?
Use tax is imposed upon the purchaser. It generally applies
to purchases from out-of-state vendors who do not collect
California tax on their sales. If sales tax would apply when
you buy a particular item in California, use tax applies
when you make a similar purchase from a business outside
the state.
For further information, please see Publication
112, Purchases from Out-of-State Vendors. This
publication is also available in Spanish (Publication
112-S).
Some purchases from out-of-state vendors,
however, may not be subject to use tax. The most
common use tax exemptions and exclusions apply when
- You buy the item in a transaction
that would be exempt or excluded from sales tax if it
occurred in California. Examples
include purchases of cold food products and purchases for
resale.
- You buy prescription medicines prescribed by a licensed
physician from a pharmaceutical manufacturer, pharmacist,
or health facility.
- You do not use the item in California
but instead ship it to a location outside the state for
exclusive use there. This
is true whether you ship the item by itself or first incorporate
it into another product.
How Do You Apply?
- Complete a BOE-38-I, Application
for In-State Voluntary Disclosure,
- Complete a BOE-735, Request
For Relief From Penalty, if applicable, and
- Complete a BOE-400-CSU, California
Consumer Use Tax Account Application.
Submit all of the above documents to your nearest Board of
Equalization office.
Board staff will contact you after receiving the above information.
Staff will complete your registration, mail you the appropriate
tax returns for you to complete and return, and arrange for
you to pay any tax, interest, or penalty due. You will be notified
if you do not qualify for the voluntary disclosure program
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