If you recently purchased a car from a private party, you may have paid too much tax to the California Department of Motor Vehicles.

I’ve been hearing complaints from constituents that DMV charged them a higher city tax rate when they don’t actually live within city boundaries.

These constituents were forced to jump through hoops to prove they didn’t owe the higher tax. As their elected representative, I was happy to assist them in obtaining refunds, but DMV should have never overcharged them in the first place.

What’s worse is that these overcharges are not isolated incidents, but rather a systemic problem resulting from DMV’s bizarre reliance on zip codes to determine tax rates.

Sales and use tax rates vary widely across California and change over time. In addition to the statewide sales and use tax rate of 7.5 percent, many cities and counties add voter-approved local taxes. The result is some cities have sales tax rates as high as 10%.

Unlike typical retail transactions, the tax rate for a vehicle sale is based on the address provided to the DMV by the registered owner, not where the sale took place. If you buy your car at a… Read More

It’s not every day a government program becomes less burdensome for small business owners and entrepreneurs, but it can happen.

In my recent op-ed “A Qualified Mess,” I described the many problems plaguing the “Qualified Purchaser Program” — a use tax collection program targeting small business owners. I invited impacted business owners to send me their feedback via a survey on my website, and I shared this feedback with my colleagues and BOE staff.

I also joined small business owners and taxpayer advocates at a press conference urging reforms to this program. This NFIB-sponsored event was well-attended and led to stories by … Read More

The “Qualified Purchasers Program” was created by the State Legislature, when it approved Assembly Bill X4 18 in 2009. I was serving as a Senator at the time and voted against the legislation. I continue to believe this new use tax collection program is a costly mistake.

To date BOE has identified more than 500,000 businesses as “qualified purchasers” and has automatically registered many of them with a “use tax” account. A qualified purchaser is defined as a service enterprise with more than $100,000 in gross receipts per calendar year that is not already registered with the Board of Equalization.

Most people are understandably confused about ‘use tax.’” The use tax applies to all Californians when you purchase items from a retailer who is not located in California and not registered to remit tax to California. Prior to the creation of the Qualified Purchaser Program, there were already two different ways for Californians to report use tax—(1) BOE Form 79b and (2) a dedicated line on state income tax forms.

My review of this new… Read More