California Use Tax Issues & Responses

Why we are asking this question in your organizer. Why it is necessary for you to answer the question.

California requires taxpayers to pay use tax (sales tax) on items purchased out of state that are brought into California and first used in California.

This has always been California law but until the Internet, the amount was probably negligible. Now, however, it is one of the predominate ways to purchase items and California wants it's tax. They have made this perfectly clear by incorporating the collection of this tax by incorporating it into your non-business tax return. (Business returns have a different procedure.)

The line item has been on the CA 540 tax return since 2003. The CA Board of Equalization (the enforcement and collection arm for sales/use tax) is continually finding more and more ways to enforce this law. Those in business are getting letters - audits going back 8 years is possible.

Please answer the question in the organizer and if the answer is YES please send us a list itemizing your out of state purchases.

2010 Haiti Relief Contribution Deductible for 2009

Charitable Haiti Relief Contributions made before March 1, 2010 are deductible on your 2009 tax return according to a law passed by Congress. H.R. 4462 is expected to be signed by the President. This contribution is retroactive to any Haiti contribution made after January 11, 2010.

For those of you who used technology to make your contribution via a text message your telephone bill showing name, date, and amount will serve as substantiation.

States, such as California, who must pass conforming legislation have not had a chance to do so yet but we understand it is in progress.

If you have, or intend to make, a Haiti charitable contribution and are going to deduct it on your 2009 tax return please make a special note of it in your organizer or send us an e-mail.