"Qualified Purchasers" Face April 15th Deadline for Use Tax!
California recently issued a reminder about the April 15th deadline for registering and filing use tax returns if you are a "qualified purchaser." This requirement began last year. Check out my post from March 2010 for the background.Definition of Qualified Purchaser
A qualified purchaser is a business that receives at least $100,000 in gross receipts per year from business operations, is not required to hold a seller's permit with BOE, is not a holder of a use tax direct payment permit, is not required to be registered with the BOE, and is not otherwise registered with the BOE to report use tax.
Required to Pay Use Tax Even if Registration Not Required
Businesses that do not meet the $100,000 gross receipts threshold are still required to report and pay use tax, but are not required to register with the BOE for that purpose. Persons that have multiple businesses with the same ownership must register if the aggregate gross receipts of those businesses meet or exceed the $100,000 threshold.
Who Does this Impact?
This requirement mostly impacts service providers such as law firms, medical offices, accountants, and other professionals operating in California who have not had any reason in the past to register with the California Board of Equalization for sales or use tax. Despite not being required to register or report, service providers have always had an obligation to file and pay use tax on purchases.
Check out California's website for more info.
Brian Strahle is the owner of LEVERAGE SALT, LLC where he provides state and local tax technical services to accounting firms, law firms and tax research organizations across the United States. He also writes a weekly column in Tax Analysts State Tax Notes entitled, "The SALT Effect." For more info, visit his website: www.leveragestateandlocaltax.com
You can reach Brian at firstname.lastname@example.org.
Because state and local taxes are deceptively simple and endlessly complicated.