What Type of Tax Does the BOE Collect?

On: May 25, 2018

Sales and Use Tax: California’s sales tax generally applies to the sale of merchandise, including vehicles, in the state. California’s use tax applies to the use, storage, or other consumption of those same kinds of items in the state.

Generally, if sales tax would apply when you buy physical merchandise in California, use tax applies when you make a similar purchase without tax from a business located outside the state.

Sales and Use Tax is collected by a business or vendor when the transaction is made. The Buyer pays the tax. The business or vendor is to hold that tax in trust to be reported and paid to the BOE on behalf of the state of California. These funds are not considered as being the business’, but the taxpayers’ and the state’s, and failure to report and pay this tax is looked upon as a form of theft and breach of fiduciary duty. This is how businesses get into trouble with the BOE.

As of July 1, 2017, the new California Department of Tax and Fee Administration has taken over the monitoring and collection of sales and use tax. All existing legal and enforcement procedures have remained in place to date (9/8/17) as under the BOE. The BOE will continue to function as an agency administering property, alcoholic beverage, and insurance taxes.