California 540 question about use tax on line 91 - How are you handling this?

[nancyrosetaxserv]

How are people dealing with this new question on the 2017 Ca return?  Asking clients if they have ever bought anything out of state or online and not paid taxes?  How are they supposed to know that?  Or giving them the option of checking the box that says they do not owe any?  Or going with the Use Tax Table?

[Just-Lisa-Now- · Accepted solution]

I ask my clients if they purchased anything out of state or online for which they didn't pay CA state sales tax....and they all look at me like I'm crazy and I just tell them, "Hey, its California, I gotta ask"  

So far, everyone has said NO.

[PhoebeRoberts]

A bunch of my clients pay use tax. Some use the table, some give me the total purchase amount. None of them have ever asked "how am I supposed to know that." 😉

[Just-Lisa-Now-]

What's the most common reason for paying use tax?  what is it that people are buying and not paying tax at the time of the transaction?

[PhoebeRoberts]

Amazon, for instance, only started collecting sales tax in March 2017 in my state. And the still only collect on sales where Amazon is the vendor, not "fulfilled by Amazon" items.

[Just-Lisa-Now-]

Ahhh ok.....I shop on Amazon all the time, I always see the CA sales tax included on my purchases.....how the heck do you get your clients to keep track of that kind of stuff?  Can they print a report at the end of the year through Amazon?

[lweav]

Watch out for animals lovers in CA who shop on Chewy.com they haven't paid sales tax and should report.  Heaven forbid chewy ever hands over there records to the BOE

[Just-Lisa-Now-]

Ohhhh...I just purchased from Chewy.com a couple days ago  Used the phone app, didn't even notice the sales tax part....was just trying to get over the limit for free shipping  LOL

Well crap, one more thing I have to keep track of!

[lweav]

Yes, exactly none of us wants to be the tax preparer that the BOE goes after and publicizes for not paying their use tax.  I owe $11 from chewy purchases.

[IRonMaN]

I'm a frequent flier for Chewy, but what is that saying ....................... oh yeah, CAGMC :oncoming_police_car:

[Just-Lisa-Now-]

I just looked at my Chewy.com order receipt in Email and its got "estimated" tax shown on it....comes out to be the CA sales tax rate in my city.

[lweav]

My purchases from 2017 have no sales tax collected.

[Just-Lisa-Now-]

OK, this was just ordered in 2018...maybe they changed their policies for 2018?    I'll have to dig through my old email at home and see what my 2017 purchases show.

[gild1323]

Once the buyout of Chewy.com by Petsmart was complete, Chewy started charging sales tax in CA, since there are Petsmarts in CA.

[rbynaker]

One of my clients shared with me a way to get the info out of Amazon.  Lemme see if I can find it . . .

From a browser (not an app) log in to your amazon.com account.  Pull up "Your Account".  Scroll down a bit, on the left side under "Ordering and shopping preferences" you should find "Download order reports"  Click it.

On the right side under "Quick Set Options" click on "Last Year (2017)".  All that does is automatically put in the Start and End Dates for you, but it beats entering them yourself.

I'd recommend the "Items" report since one order may have multiple items, some of which have sales tax and some don't.  You can give it a name if you want, like "2017 Items".  Click "Request Report" and it will generate a csv file that you can open in Excel (or Google Sheets or OpenOffice).  Column AC is the tax collected.  Sort/filter/whatever you'd like to remove the ones that do have sales tax.  Total the AB column for the rest.

We have an extra annoying step in VA because the sales tax rates are different on groceries vs. non-groceries.  So the AmazonFresh stuff (or Hello Fresh, Blue Apron, etc.) has a lower tax than other things.  There may be some massaging of data needed.  But it's better than not having any data at all.

It's always existed (and I've been paying it for as long as I can remember) but in 2016 VA began requiring a response so I have a blurb that I copy/paste and email to clients.  Most of them say no, but some give me numbers.

Rick

[sjrcpa]

I always ask in my Organizers. Some clients give me the amount of their nontaxed purchases.