Holiday Sellers and Shoppers: Many Seasonal Items are Taxable
Consumers May Owe Tax on Online Purchases
With fall in the air and the holiday season fast approaching, the Board of Equalization (BOE) today reminds Californians of their seasonal tax obligations.
Sales of many seasonal items, such as Christmas trees and firewood, are taxable. In addition, purchases of many holiday items, such as holiday cards and books, are taxable even when purchased from an out-of-state seller. Consumers are reminded that use tax is due on purchases they make from out-of-state retailers online - even if the retailer does not charge California tax.
Firewood sales, as well as labor or service charges related to firewood sales (cutting, splitting, delivery, etc.) are taxable. Christmas trees, wreaths, ornaments, and other similar holiday items are also subject to sales tax.
If you plan to sell any of these items this holiday season, you should register with the BOE and obtain a seller’s permit. Generally, there is no sales tax exemption for charities, nonprofits, and civic organizations. Individuals or organizations that make three or more sales in any 12-month period should contact the BOE to apply for a seller’s permit. Those planning to sell only during the holiday season should apply for a temporary seller’s permit.
BOE representatives perform inspections statewide at flea-markets, Christmas tree lots, and street-vending locations to ensure that businesses are properly registered.
For more information about obtaining a California seller’s permit, see publication 73, Your California Seller’s Permit. For more information about nonprofit organizations, see publication 18, Nonprofit Organizations, available online at www.boe.ca.gov, or contact the BOE’s call center at 800-400-7115.
The BOE advises that consumers keep receipts from online purchases. Most consumers are familiar with sales tax that is applied when a purchase is made from a California retailer. When a purchase is made from an out-of-state retailer, however, if the retailer does not collect California tax, as is the case with many out-of-state retailers, the consumer is required to self-report and pay use tax on the purchase. Consumers should keep receipts from online and catalog purchases from out-of-state retailers to make sure that California tax was collected. The rate of use tax owed is equivalent to the sales tax rate where the items will be used, which usually means where the purchaser lives.
Use tax can be reported by individual and business taxpayers who are not required to hold a seller’s permit through a separate line on their California income tax return. A BOE consumer use tax return can also be filed directly to BOE. The consumer use tax return, along with an information booklet, California Use Tax for Purchases Made from Out-of-State Businesses, is available for download at http://www.boe.ca.gov/pdf/pub79b.pdf. If the purchaser has a seller’s permit, the use tax should be reported on their regular return. For more information, see the links below or contact the BOE’s call center at 800-400-7115.
The California State Board of Equalization is a publicly elected tax board. The BOE collects more than $53 billion annually in taxes and fees supporting state and local government services. It hears business tax appeals, acts as the appellate body for franchise and personal income tax appeals, and serves a significant role in the assessment and administration of property taxes. For more information on other taxes and fees in California, visit www.taxes.ca.gov.
Source: Board of Equalization
