California Qualified Purchaser Program

LLC just received a "Notice of Close-Out of Use Tax Account Under the Qualified Purchaser Program."

Assembly Bill x4-18 (Stats. 2009, Ch. 16) added section 6225 to the Revenue and Taxation Code, which requires a "qualified purchaser" to register with the Board of Equalization (BOE) and report and pay use tax directly to the BOE. This is required even if the Q.P. has no use tax to report or pay.

I called the State BOE, and they said what the letter says: s After I am registered will I be required to file returns for subsequent years? Yes, Revenue and Taxation Code section 6225 requires the person to be registered on an ongoing basis, and you are required to file returns for each calendar year your business is operating.

I told the kind lady that the law says nothing about canceling the account after three years, and if the entity is required to file each year, will they have to open another account. She says the entity will no longer have to file if its use tax liability is zero. I asked what regulation says that, since the statute does not. She said it was in the BOE operations manual (or some such thing), so I ask her to send me a copy. But they don't give that out to the public. So it is secret? No it is not secret, we just don't give it out.

So, I told her I won't file, and when they come after me I will say some nice lady in Sacramento told me not to, but it would be our little secret.

Any thoughts?

Reply to
Pico Rico
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My thought is, use google. I was able to find BOE manuals on their website that way.

___ Stu

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Reply to
Stuart A. Bronstein

well I did google before, but I did again. No manual, and no definitive answer I can find, but here is an Informal Issue Paper, which may have evolved into what has transpired.

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Of course, the BOE doesn't know how to write. Their letter and their web site do not properly explain what they are doing.

I also like this:

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Reply to
Pico Rico

messagenews:Xns9F91BEC036174spamtraplexregiacom@130.133.4.11...

The Board of Equalization approved the staff recommendations in the Informal Issue Paper at its meeting on July 27, 2011 (minutes here:

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This procedure is similar to the automatic closure of a seller's permit after three years of zero returns, a procedure that has been in place for many years. It does not relieve the seller, or the previously qualified purchaser, of responsibility to remit sales and use taxes actually incurred. If the OP makes purchases subject to use tax after his account has been closed, he is responsible to report and pay the tax; if he owns the business as an individual, he can report and pay it with his California individual income tax return.

Katie in San Diego.

Reply to
Katie in San Diego

messagenews:Xns9F91BEC036174spamtraplexregiacom@130.133.4.11...

here:

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P.S. The purpose of closing out the account after three zero returns is cost saving for both the taxpayer and the state -- no need to continue filing and processing zero returns.

Katie in San Diego

Reply to
Katie in San Diego

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