The California Board of Equalization (BOE) is reminding taxpayers to report and pay the use tax they owe on their 2011 personal income tax returns. To make things easier, they have created a Use Tax Lookup Table, which will estimate the amount of use tax that is owed. The estimate is based on California Adjusted Gross Income and works for non-business purchases of items totaling less than $1,000 each. Items purchased for $1,000 or more must be reported in addition to the estimated amount. Non-business taxpayers have the option to track and record actual purchases subject to use tax rather than use the estimated amount. Items purchase for a trade or business not required to be registered with the BOE bust be tracked and reported based on actual purchases.
Just like a business owes use tax on items purchased out-of-state, so do individuals. Use tax is due on items purchased from out-of-state retailers that did not charge the California tax. The tax is due assuming the purchase would have been taxable had it been made in California. If another state’s tax was charged on the purchase, then it is allowed as a credit towards the amount due to California.