Recently, the Board of Equalization has contacted some CTA members to notify them that they are “Qualified Purchasers” subject to newer use tax reporting requirements.
So who is a Qualified Purchaser?
A "qualified purchaser" means a person that meets all of the following conditions:
1) The person receives at least $100,000 in gross receipts from business operations per calendar year. Note: Gross receipts is the total of all receipts from both in-state and out-of-state business operations.
2) The person is not required to hold a seller's permit or certificate of registration for use tax (under section 6226 of the Revenue and Taxation Code).
3) The person is not a holder of a use tax direct payment permit as described in section 7051.3 of the Revenue and Taxation Code.
4) The person is not otherwise registered with the BOE to report use tax.
For motor carriers not otherwise engaged in retail operations, and who do not regularly order products from out-of-state, this may be the first time you have been asked to register Use Tax with the State.
In 2009 budget trailer bill, AB 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.
Generally, use tax applies when a person or business in California purchases tangible merchandise to be used, consumed, given away, or stored in this state from a retailer outside of this state who does not collect California tax on the sale. In simpler terms, if sales tax would apply when a particular item is purchased in California, use tax applies when a similar purchase is made from a retailer outside the state and no tax is charged.
Only the registration requirement is new under AB x4-18.
A reminder from CTA that first appeared in the December 14, 2011 CTA Policy Update
Many of our members have informed CTA that they have received a notice from the California Department of Motor Vehicles (DMV) regarding payment for 2012 Unified Carrier Registration (UCR) fees. Many carriers that cross state lines in order to move their cargo are already enrolled in the UCR system. However many carriers that do not cross state lines but do carry “interstate” freight, have not participated in the UCR system.
Last year, the DMV provided these intrastate carriers an option for UCR payment in order to fall into compliance with the UCR regulations. The option given by DMV was for carriers that hold a current MCP, whose freight is deemed “interstate” but do not leave the state with the freight, to pay into the UCR system if they so choose.
By definition of the UCR program carriers that transport interstate cargo are subject to the UCR fees, regardless if you leave the state or not. In light of CTA members concerns and questions surrounding UCR fees, CTA requested that DMV produce a document that attempts to clarify the rules for carriers who are subject to the UCR fees.
DMV Consolidates Motor Carrier Division
Late last week the DMV announced that it will be consolidating the Motor Carrier and Registration Operations Division. According to DMV the consolidation “will improve the strengths of each area, while maintaining their focus on serving industry and individual customers. The transition will develop an organizational structure that maximizes the skill sets of our employees and realigns functions within the newly-consolidated division.
DMV anticipates that realignment efforts will continue through the remainder of the calendar year.
Current Motor Carrier Division Deputy Director Wes Goo has transitioned to Field Operations. The Registration Operations Division Deputy Director, Kathleen Rose will oversee the newly–consolidated division.
The remaining Motor Carrier Division management team and staff will remain in their current positions until the transition is complete. DMV does not anticipate any interruption in the services they provide to the industry.
This item will be discussed at the upcoming Highway Policy Committee meeting. Andrew Conway and Deb Hill (DMV) have confirmed their attendance.
For more information contact Eric Sauer at email@example.com
In Washington, DC lawmakers this week will be focusing on the new multi-year surface transportation reauthorization bills, aka "The Highway Bill", being voted on in both the House and the Senate. In advance of the votes this week, the CTA Board of Directors voted to approve the Federal Surface Transportation Reauthorization Policy Guideline that will help our association advocate for positions that are focused on trucking mobility and competitiveness. The guideline was developed by CTA's Infrastructure Task Force.
As a general policy statement, The California Trucking Association supports fair and equitable federal policies and funding decisions that are aimed at:
Questions about the Highway issues? Please contact RJ Cervantes at: firstname.lastname@example.org