Internet Sales Tax
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INTERNET SALES TAX

All organizations must report and pay a "use tax" whenever they go out of state to purchase goods where the retailer does not charge a sales tax.

The use tax was created by the Legislature to protect California sellers who would be at a competitive disadvantage when out-of-state retailers sell goods to California consumers without charging a tax. The use tax is set at the same rate as the state's sales tax and must be paid directly to the Board of Equalization on the association's Franchise Tax Board Income Tax Return.

The tax was implemented in 1935 but rarely enforced until 2006 when California formed the Interstate Consumer Analysis Team (ICAT).

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