For Immediate Release
January 16, 2008

California SBE Reminds Taxpayers of Their Responsibilities for Tax on Out of State Purchases

California SBE Reminds Taxpayers of Their Responsibilities for Tax on Out of State Purchases

California SBE Reminds Taxpayers of Their Responsibilities for Tax on Out of State Purchases

Earlier this year, on July 1st, California use tax requirements changed on the purchase of vehicles, vessels, and aircraft that are purchased outside of California and subsequently brought into the state. In general, the changes are as follows:

  1. Purchasers of vehicles, vessels, and aircraft owe California use tax when they buy any of these items outside of California and bring them into the state within 90 days.
  2. Purchasers of vehicles, vessels, and aircraft do not owe use tax, if the vehicle, vessel, or aircraft is used outside of California more than one-half of the time in the first six months after it is brought into the state.
  3. Previously, for purchases made between October 2, 2004 and June 30, 2007, use tax was due it the purchaser brought the vehicle, vessel, or aircraft into California within 12 months of the purchase.

Taxpayers are also reminded that a 40% penalty can be assessed on a person who knowingly collects and fails to pay sales or use tax to the State of California. Certain exemptions apply and each potential penalty assessment is reviewed prior to its application. The penalty is only applicable to liabilities for reporting periods after December 31, 2006.

If you would like additional information on this topic or have any questions, please contact the taxdesk@thesaltgroup.com

 

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