California Tax Information For City And County Officials

8/6/2019 California Tax Information For City And County Officials

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Tax Information for City andCounty OfficialsLocal Sales and Use Tax Transactions (Sales) and Use Tax

Publication 28 | MaRcH 2011

boaRD MEMbERS

bEttY t. YEEFrs DsrS Frs

SEn. GEoRGE RunnER (Ret.)Sed Dsrlser

MicHEllE StEElthrd DsrRg Hs Eses

JERoME E. HoRtonFrh Dsrls agees

JoHn cHianGSe crer

KRiStinE caZaDDiermExeve Drer


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PREFacE

We have prepared this publication to explain how the Board o Equalization (BOE) administers laws that govern

locall imposed sales or transactions, and use taxes. The inormation is designed to help cit and count oicials

understand tax programs and how the can use our services. We have also included inormation on annexation

procedures as the relate to sales, transactions, and use tax programs.

I ou have questions that are not answered in this publication, please visit www.boe.ca.govor call our Taxpaer

Inormation Section at 8004007115. Customer service representatives are available to answer our questions

weekdas between 8:00 a.m. and 5:00 p.m. (Paciic time), except state holidas.

We welcome our suggestions or improving this or an other publication. Please send our suggestions to:

Board o Equalization

Local Revenue Allocation Unit

450 N Street, MIC:27

PO Box 942879

Sacramento, CA 942790027

Telephone: 9163243000 FAX: 9163243001

To contact our Board Member, see www.boe.ca.gov/members/board.htm.

Note:This publication summarizes the law and applicable regulations in eect as o the date o printing. However,

changes in the law or in regulations ma occur. I there is a conlict between the text in this publication and the law,

the law will alwas be controlling.
http://www.boe.ca.gov/http://www.boe.ca.gov/members/board.htmhttp://www.boe.ca.gov/members/board.htmhttp://www.boe.ca.gov/


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contEntS

Title Page

State, Local, and District Taxes 1

Sales Tax Compared to Use Tax 5

Special Allocation Procedures 7

Schedules Used or Reporting the Combined

One Percent State and Local Tax Allocation 11

Tax Agreements among Local Jurisdictions 12

Administrative Charges and Costs 13

Using Tax Area Codes to Distribute Local Taxes 14

District Transactions (Sales) and Use Taxes 17

Method o Pament 19

Annual Allocation CalendarLocal and District Taxes 20

Using Registration Data to Ensure Correct Allocation 23

Temporar Sellers, Special Events, and Trade Shows 24

Access to BOE Records 25

Sales and Use Tax Registration and Allocation

Inormation 26

BOE Oices Administering Local Taxes 28


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Submitting Petitions or Reallocation or Redistribution/Date o Knowledge 29

Appealing Proposed Reallocations 32

New Local Jurisdictions 33

Annexation Procedures 34

Exhibits 36

Glossar o Terms 71

BOE Website Resources or Local Jurisdictions 73

For Further Assistance 75


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1

StatE, local, anD DiStRict taxES

MARCH 2011|

TAX INFORMATION FOR CITy AND COUNTy OFFICIALS

The BOE administers local taxes under the BradleyBurns Uniform Local Sales and Use Tax Lawand district taxes under

the Transactions and Use Tax Law, which are divisions o the Revenue and Taxation Code.

Recent Developments

Eective October 23, 2009, Revenue and Taxation Code section 6225, Registration for Use Tax, requires that a quali

ied purchaser be registered with the BOE and report and pa use tax owed. Under this new legislation, a qualiied

purchaser means a person that receives at least $100,000 in gross receipts per calendar ear, is not required to hold

a sellers permit or certiicate o registration, is not a holder o a use tax direct pament permit, or is not registered

with BOE to report use tax.

As o Jul 1, 2009, the Public Utilities Code, section 130350.5, allows the Count o Los Angeles to impose an

additional .50 percent (1/2 percent) transactions and use tax or up to 30 ears. The Public Utilities Code allows Los

Angeles Count to impose up to 2.5 percent in additional transactions and use tax while all other counties ma

impose up to 2 percent.

Eective April 1, 2009, the Budget Stabilization Constitutional Amendment added Revenue and Taxation Code

sections 6051.7 and 6201.7 increasing the state sales and use tax rate on the sale o, and on the storage, use or otherconsumption o, tangible personal propert, b one percent to a rate o 7.25 percent rom April 1, 2009, until

Jul 1, 2011. This increased the statewide base tax rate to 8.25 percent.

In August 2008, the BOE established a Statewide Compliance and Outreach Program (SCOP). Under this program, BOE

conducts ield visits o businesses in selected areas around the state or routine license checks. This program is part

o a statewide eort to increase tax compliance and make sure all retailers are treated uniorml.

Eective Januar 1, 2008, section 7269, Limitation on Redistributions of District Taxes, was added to the Revenue

and Taxation Code. This section establishes a limiting statute on redistribution o district tax similar to the limit

ing statutes o local tax jurisdictions which have been in eect since 1959 under section 7209. Section 7269 limits

a redistribution o district tax to two quarterl periods prior to the BOE obtaining knowledge o an improper

distribution.

Regulation 1807, Petitions for Reallocation of Local Tax andRegulation 1828, Petitions for Distribution or Redistribution

of Transactions and Use Tax, were amended to change the review and appeals process o the petitions. Regulation

1828 also clariies the limitation period or redistributions. A threeear statute o limitations is applicable or redis

tributions where the date o knowledge is prior to Januar 1, 2008. As o Januar 1, 2008, redistributions can onl

include amounts rom the two calendar quarters prior to the date o knowledge.

Regulation 1802, Place of Sale and Use for Purposes of BradleyBurns Uniform Local Sales and Use Taxes, changed the

place o sale or sales o jet uel. Prior to Januar 2008, or retailers who had onl one place o business in Caliornia,

or those that negotiated their sales out o state, the local tax on jet uel sales was allocated according to a com

pans phsical location where the sale or purchase was made. As o Januar 1, 2008, the place o sale is now the

point o deliver where the uel is pumped into the aircrat.

Regulation 1802(c)(2), Place of Sale and Use for Purposes of BradleyBurns Uniform Local Sales and Use Taxes, and

Regulation 1699(a), Permits, were changed to broaden the conditions where warehouse selling locations are issued

permits.

1. OutoState Retailer whose Caliornia presence is limited to a stock o goods location:

Regulation 1802(c)(2) states, I an outostate retailer does not have a permanent place o business in this

state other than a stock o tangible personal propert, the place o sale is the cit, count, or cit and count

rom which deliver or shipment is made. Local tax collected b the BOE or such sales will be distributed to

that cit, count, or cit and count.
http://www.boe.ca.gov/sutax/SCOP_FAQ.htmhttp://www.boe.ca.gov/pdf/reg1807.pdfhttp://www.boe.ca.gov/pdf/reg1828.pdfhttp://www.boe.ca.gov/pdf/reg1802.pdfhttp://www.boe.ca.gov/pdf/reg1802.pdfhttp://www.boe.ca.gov/pdf/reg1699.pdfhttp://www.boe.ca.gov/pdf/reg1699.pdfhttp://www.boe.ca.gov/pdf/reg1802.pdfhttp://www.boe.ca.gov/pdf/reg1802.pdfhttp://www.boe.ca.gov/pdf/reg1828.pdfhttp://www.boe.ca.gov/pdf/reg1807.pdfhttp://www.boe.ca.gov/sutax/SCOP_FAQ.htm


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TAX INFORMATION FOR CITy AND COUNT y OFFICIALS |

MARCH 20112

According to Regulation 1699:

ApermitisrequiredforeachstockofgoodslocationmakingretaildeliveriesinCaliforniaconsistentwith retail sales orders negotiated outostate.

Localtaxontheseordersmustbeallocatedtothestockofgoodslocationfromwhichdeliveryismade.

2. OutoState Retailer whose Caliornia presence is not limited to a stock o goods location.

I a retailer has a permanent place o business in this state in addition to its stock o goods location, the place

o sale, in cases where the sale is negotiated outostate and there is no participation b the retailers perma

nent place o business in this state, is the cit, count, or cit and count rom which deliver or shipment is

made. Local tax collected b the BOE or such sales will be distributed to the cit, count, or cit and count

rom which deliver or shipment is made.

ApermitisrequiredforeachstockofgoodslocationmakingretaildeliveriesinCaliforniaaccordingtoretail sales orders negotiated outostate.

LocaltaxontheseordersmustbeallocatedtotheCaliforniastockofgoodslocationfromwhichdeliver is made.

PermitsareassignedAccountCharacteristicCode026.

PermitsareassignedAccountCharacteristicCode007.

SalesordersnegotiatedatCalifornialocations,deliveredfromanin-statestockofgoods,mustcontinue to be allocated to the place where the principal negotiations or the sale take place.

Table 1

Allocation Guidelines for Allocation of Local Tax Warehouse Sales

Sales are Negotiated Merchandise Shipped From Shipping Terms Allocation Procedure

In Caliornia Caliornia Inventor An On Schedule C Opposite

the location where sales were

negotiatedIn Caliornia OutoState Inventor FOB Destination

Outside Caliornia Caliornia Inventor owned

b the seller

An On Schedule C Opposite the

location the goods were

shipped rom

Outside Caliornia OutoState Inventor FOB Shipping Point On Schedule B Opposite the

count o destinationOutside Caliornia OutoState Inventor FOB Destination

In Caliornia OutoState Inventor FOB Shipping Point On Schedule B Opposite the

count o destination

Outside Caliornia (Drop shipments) Inventor

owned b the supplier

An On Schedule B Opposite the

count o destination

Please note: For allocation o local tax, the place that the sale is negotiated is considered to be the place that the order is taken, with

out regard to the act that the order must be orwarded elsewhere or acceptance, approval o credit, shipment, or billing. In those

instances where orders are not taken at a registered place o business (orders taken b traveling sales people), the place o sale will be

considered to be the place o business to which sales people report.

Statewide Sales and Use Taxes

Under the Caliornia Sales and Use Tax Law, the sale o tangible personal propert is subject to sales or use tax

unless exempt or otherwise excluded. When the sales tax applies, the use tax does not appl and the opposite is

true. The sales tax is imposed on all retailers or the privilege o selling tangible personal propert in the state o

Caliornia and is measured b the retailers gross receipts. Use tax is imposed on the purchaser o tangible personal

propert rom an retailer not required to pa sales tax to the state, or storage, use, or other consumption in this

state and is measured b the sales price o the propert purchased. However, i an outostate retailer is engaged in


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|TAX INFORMATION FOR CITy AND COUNTy OFFICIALS 3

business in this state, it is required to register with the BOE and collect the use tax rom the purchaser at the time o

making the sale.

Components o the Statewide Sales and Use Tax

There is an 8.25 percent statewide sales and use tax base rate that is collected b the BOE. The base rate is com

posed o a state portion and a local portion or cities and counties.

Since April 1, 2009, the state portion has been seven percent while the BradleBurns local sales and use tax rate has

been 1.25 percent (one percent local and 0.25 percent count transportation und). The ollowing table shows the

tax components and their authorizing Revenue and Taxation Code sections.

Table 2

Components of the Statewide Sales and Use Tax Rate

Jurisdiction (Fund) R&T Code Pre-// Rate Post-// Rate

State (General Fund) 6051, 6201 4.75% 4.75%

State (Local Revenue Fund, SLRF) 6051.2, 6201.2 0.50% 0.50%

State (Local Public Saet Fund, LPSF) S. 35, Art. XIII 0.50% 0.50%

State (General Fund, ASUT) 6051.3, 6201.3 0.25% 0.25%

State (Fiscal Recover Fund) 6051.5, 6201.5 0.25% 0.25%Local (Count Transportation Fund) 7203.1 0.25% 0.25%

Local (Cit or Count Operations) 7203.1 0.75% 0.75%

State (Budget Stabilization Fund) 6051.7, 6201.7 0.00% 1.00%

BASE STATEWIDE RATE .% .%

The state has deposited the 0.25 percent state tax increase into the Fiscal Recover Fund to pa or bonds issued

or deicit reduction. Cities and counties will be reimbursed or the 0.25 percent reduction to local sales and use tax

revenues in Januar and Ma o each ear using propert tax revenues collected and disbursed b their respective

counties. The reduction to the local sales and use tax rate will continue until the Director o Finance notiies the BOE

that the State o Caliornias obligations or the bonds have been satisied.

Taxpaers have not changed how the allocate and report the local sales and use tax on their returns and accompa

ning schedules. The BOE is handling the necessar adjustments or the 0.25 percent reduction administrativel.

O the one percent local portion, cities and counties are able to use 0.75 percent to support general operations. The

remaining 0.25 percent is designated b statute or count transportation purposes and ma be used onl or road

maintenance or the operation o transit sstems. Counties have been receiving this 0.25 percent or transportation

purposes since 1972 when sales tax was irst levied on gasoline.

The state sales and use tax rate is subject to change upon action b the Caliornia Legislature. The rates quoted in

this publication are correct as o the date o printing; however, ou should consult with one o our local ield oices

i ou have questions regarding rate changes.

Redevelopment Agencies

Redevelopment agencies are dedicated to improving Caliornia communities b combating the blight in declin

ing neighborhoods and business districts. Beginning Januar 1, 1986, redevelopment agencies were authorized

to impose a sales and use tax at a rate o one percent or less, to be credited against the cits sales and use tax.

Eective Januar 1, 1994, the law authorizing the creation o new redevelopment agencies or sales and use tax

purposes was repealed. Some redevelopment agencies that were approved prior to that date remain in eect and

continue to receive sales and use tax revenues. New redevelopment agencies are still permitted or propert tax

purposes.


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TAX INFORMATION FOR CITy AND COUNTy OFFICIALS |

MARCH 20114

District Taxes

In addition to the state and local taxes, the BOE administers transactions (sales) and use taxes or voterapproved

special taxing districts. In two elections that were held on April 13, 2010, and June 8, 2010, voters approved ive new

district taxes that became operative October 1, 2010.

As o October 1, 2010, there are 119 special taxing districts in the state with tax rates or each district ranging rom

0.10 percent to one percent. O these districts, there are 18 citcount combinations and 10 counties with multiple

district taxes in eect. The statewide tax rate where there are no special taxes in eect is 8.25 percent. The com bined state, local, and special district tax rates range rom 8.375 percent (Nevada, Solano, and Stanislaus Counties)

to a current maximum (in the cities o Pico Rivera and South Gate) o 10.75 percent.


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MARCH 2011|

TAX INFORMATION FOR CITy AND COUNTy OFFICIALS 5

SalES tax coMPaRED to uSE tax

Sales Tax Allocation

Local tax allocation is based on whether the transaction is subject to sales tax or use tax. The sale is subject to sales

tax i the retailers registered place o business in Caliornia participates in the sale and title o the goods passes

to the customer within this state. I both conditions are not met, the applicable tax is use tax. Local tax allocation

procedures dier between sales and use tax. The allocation o local sales tax is determined b the nature o the

participation o the retailers registered place o business in the sale.

I a retailer has one registered place o business in Caliornia and it participates in the sale, the local sales tax is allo

cated to the jurisdiction in which that place o business is located.

I a retailer has more than one registered place o business in Caliornia and onl one place o business participates

in the sale, the local sales tax is allocated to the jurisdiction where that place o business is located. However, i more

than one place o business participates in the sale, the local sales tax is allocated to the jurisdiction in which that

place o business is located where the principal negotiations are carried out.

In order to receive a seller s permit or a location rom the BOE, a place o business must:

Beoneinwhichtheretailerhasaproprietaryinterest(thatis,ownershiporlease). Bealocationwhereemployeescustomarilynegotiatesales. Beoneinwhichtheretailerhasemployeespermanentlystationedorattributedthere.

or

BealocationwhereastockofgoodsisheldinCaliforniaandfromwhichdeliveriesaremadebythesellerspersonnel according to orders placed out o state. (Eective April 1, 2006, sellers with Caliornia sales loca

tions are required to have sellers permits or such stock o goods locations even though instate oices are

maintained.)

When a retailer obtains a sellers permit or a place o business, a tax area code is assigned to identi the business

location. Generall, the local sales tax is allocated to the assigned tax area code o the taxpaers registered place obusiness. When a sale cannot be identiied with a permanent place o business in this state, the local sales tax is allo

cated to the local jurisdictions through countwide or statewide pools. Accordingl, certain sellers are authorized

to report their local sales tax either on a countwide or statewide basis. These ma include auctioneers, construc

tion contractors making sales o ixtures, catering trucks, itinerant vendors, vending machine operators, and other

permit holders who operate in more than one local jurisdiction, but are unable to readil identi the particular

jurisdiction where the taxable transaction takes place. Special allocation procedures appl to auctioneers and con

struction contractors in speciic circumstances (see Exhibit A).

Use Tax Allocation

Use tax is imposed on the purchase or storage, use, or other consumption in this state o tangible personal prop

ert purchased rom a retailer. When title to propert transers to the Caliornia customer outside this state, thetransaction is subject to use tax regardless o whether an registered place o business o the retailer participates in

the sale. The local use tax is generall allocated through a countwide pool to the local jurisdictions in the count

where the propert is put to its irst unctional use. The shiptoaddress is presumed to be the place o use. Exam

ples o taxpaers who report use tax allocated through the countwide pool include construction contractors who

are consumers o materials used in the improvement o real propert and whose job site is regarded as the place o

business, outostate sellers who ship goods directl to consumers in the state rom a stock o goods located out

side the state, and Caliornia sellers who ship goods directl to consumers in the state rom a stock o goods located

outside the state.


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MARCH 20116

Local use tax reported on line 2 o the sales and use tax return should be reported b the retailer using the tax area

code assigned to the registered business location i the use is made at that registered business location; otherwise,

it should be reported to the count o use. Local use tax ma be directl allocated to the jurisdiction o use in cer

tain circumstances (see Special Allocation Procedures).

Sales Made Through the Internet

As the volume o Internet commerce continues to increase, more and more local jurisdictions are expressing con

cern over prospective reductions in sales and use tax revenue. Internet retailers located in Caliornia are required topa sales and use tax and report local tax revenues like other retailers. Use tax applies to purchases over the Inter

net rom outostate retailers the same wa as it does to purchases made b telephone and mail order. That is, i

the Internet retailer has the necessar phsical presence (nexus) in Caliornia, the are considered to be engaged in

business in this state and must collect use tax when goods are delivered to purchasers in this state.


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MARCH 2011|

TAX INFORMATION FOR CITy AND COUNTy OFFICIALS

7

SPEcial allocation PRocEDuRES

Use Tax Direct Pament Permits

Eective Januar 1, 1998, section 7051.3 was added to the Revenue and Taxation Code, to create the Use Tax Direct

Payment Permit, which, under speciied circumstances, we ma issue to qualiied taxpaers. Applicants must certi

to us either o the ollowing:

Theapplicantisthepurchaserforitsownuseoristhelesseeoftangiblepersonalproperty(generallyexcluding vehicle leases) at a cost o $500,000 or more in the aggregate during the calendar ear immediatel

preceding the application or the permit; or

Theapplicantisacounty,cityandcounty,orredevelopmentagency.Foryourconvenience,wehaveincludedBOE400DP, Application for Use Tax Direct Payment Permit, in this publication as Exhibit B.

Holders o a Use Tax Direct Payment Permitma issue a use tax direct pament exemption certiicate to an regis

tered retailer or seller rom whom the make purchases that are subject to use tax. Subsequentl, holders must

selassess and report the use tax due on the purchase(s) or which the certiicate was issued. The local use tax will

be reported and subsequentl distributed to the jurisdiction in which the irst unctional use o the tangible per

sonal propert occurs, rather than through the countwide pooling process.

Please note:This provision applies to use tax transactions onl. Exemption certiicates ma not be issued i the trans

action is subject to sales tax. Visit our website or the ull text o the statute or call our Audit and Inormation Section

at 9163242883 or more inormation.

Leases

Generall, the tax on leases o tangible personal propert is use tax. Thereore, local tax on rental receipts should be

reported to the local taxing jurisdiction where the propert is used. For man lessors, because o the tpe and char

acteristics o propert leased and the method o recordkeeping, it ma be extremel diicult or even impossible

to determine the precise location where the propert is actuall used. Accordingl, administrative guidelines have

been established to determine the reporting o local use tax on leases o equipment other than motor vehicles.

Regardless o whether those leases are negotiated in state or out o state, the local use tax is reported b the

taxpaer on BOE531, Schedule BDetailed Allocation by County of 1% Uniform Local Sales and Use Tax, opposite the

count o use. For taxpaers who maintain a single permanent place o business and make shortterm leases o

tangible personal propert, the local use tax should be reported to the taxpaers place o business. SeeTable 2 or

more inormation.

Table 3

Local Tax Allocation Guidelines for Leases

Lease Type and Place Negotiated Allocation Guidelines

Mobile Transportation Equipment (MTE):

Lease negotiated in state

Local use tax allocated to lessors place o business on

Schedule C.

MTE: Lease negotiated out o state Local use tax allocated on Schedule B opposite count o use.

General equipment: Lease negotiated in state or out o state Local use tax allocated on Schedule B opposite count o use.

LongTerm Leases o New Passenger Motor Vehicles

Section 7205.1 o the Revenue and Taxation Code sets orth rules or local tax reporting regarding longterm leases

o passenger motor vehicles, and certain tpes o mobile transportation equipment. A longterm lease is deined as

a lease or a term exceeding our months. The provisions o section 7205.1 are summarized as ollows:
http://www.boe.ca.gov/pdf/boe400dp.pdfhttp://www.boe.ca.gov/http://www.boe.ca.gov/pdf/boe531.pdfhttp://www.boe.ca.gov/pdf/boe531.pdfhttp://www.boe.ca.gov/http://www.boe.ca.gov/pdf/boe400dp.pdf


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IfthelessorisaCalifornianewmotorvehicledealer(definedinsection426oftheVehicleCode),theplaceofuse or reporting the local use tax is the dealers place o business.

IfthelessorisaleasingcompanyasdefinedinTable3,theplaceofuseforreportinglocalusetaxisthelessors place o business.

IfthelessorisnotaCalifornianewmotorvehicledealeroraleasingcompanyandpurchasesavehiclefromaCaliornia new motor vehicle dealer, the place o use or reporting the local use tax is the business location o

the dealer rom whom the lessor purchases the vehicle.

Inthecaseofanout-of-statelessorwhopurchasesavehiclefromanout-of-statesourceandarrangesforacourtes deliver b a Caliornia dealer, the local tax will be reported as ollows:

1. I the vehicle is taken rom the instate dealers resale inventor, the local tax should be reported to the

dealers place o business.

2. I the instate dealer does not hold title to the vehicle but merel serves to prepare the vehicle or deliver

and process documentation, the local tax should be reported to the lessees jurisdiction via the countwide

pool.

LessorsrequiredtoreportthelocalusetaxtothelocationofthedealerwilldosousingBOE-531-F,Schedule FDetailed Allocation by City of 1% Uniform Local Sales and Use Tax, which will be provided with their

sales and use tax returns.

Table 4

Local Tax Allocation for Motor Vehicle Leases, effective January ,

(Except OneWa Rental Trucks)

Type of Lessor Type of Transaction

% Local Tax Allocation to

Leases Exceeding

Four Months

Leases of Four Months

or Less

Caliornia new Motor Vehicle

Dealer/Lessor

Lease o motor vehicle* Dealer/Lessors sales

location

Dealer/Lessors sales

location

Caliornia Leasing Compan

(as deined)**

Lessors place o business Lessors place o business

Caliornia Lessor (other than anew motor vehicle dealer or

leasing compan as deined)**

Lease o a motor vehicle* pur chased rom a Caliornia new

motor vehicle dealer

Dealer/Lessors place obusiness (Schedule F)

Lease o a motor vehicle* pur

chased rom someone other than a

Caliornia new motor vehicle dealer

Lessees place o

registration (Schedule B)

Lease o MTE*** purchased rom a

Caliornia new motor vehicle dealer

(except new pick up trucks rated

less than one ton)

Lessors place o business

OutoState Lessor Lease o a motor vehicle* pur

chased rom a Caliornia new

motor vehicle dealer

Caliornia Dealers place o

business (Schedule F)

Lessees place o

registration (Schedule B)

Lease o a motor vehicle* and

MTE*** purchased rom someone

other than a Caliornia vehicle

dealer

Lessees place o registra

tion (Schedule B)

* Motor Vehicle means an (new or used) selpropelled passenger vehicle (other than a house car) or pick up truck rated less than

one ton.

** Leasing Company means a motor vehicle dealer/lessor that originates lease contracts and does not sell or assign the lease con

tracts and that has annual motor vehicle lease receipts o $15 million or more annuall or each business location.

*** MTE (Mobile Transportation Equipment) means equipment used or transporting persons or propert or substantial distances

such as railroad cars, buses, trucks and truck trailers. For a complete listing o MTE, please see Regulation 1661.


MARCH 2011
http://www.boe.ca.gov/pdf/boe531f.pdfhttp://www.boe.ca.gov/pdf/reg1661.pdfhttp://www.boe.ca.gov/pdf/reg1661.pdfhttp://www.boe.ca.gov/pdf/boe531f.pdf


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LessorswhoarenotCalifornianewmotorvehicledealersorwhodonotpurchasemotorvehiclesfromCaliornia new motor dealers shall continue to use Schedule B to report the local use tax due on longterm leases

to the lessees jurisdiction through the countwide pool.

Sales o Jet Fuel

Section 7205(b)(2) o the Revenue and Taxation code deines the place o sale or jet uel or the purposes o allocat

ing local sales tax. For local sales tax purposes we observe the ollowing:

ForperiodspriortoJanuary1,2008,thissectionprovidesthatwhentheprincipalnegotiationsareconductedin this state and the retailer has more than one place o business in this state, the place o sale shall be the

point o deliver (wingtip) o the uel.

ForperiodsonorafterJanuary1,2008,thestatutewasamendedtoread:Inthecaseofasaleofjetfuel,theplace at which the retail sale o that jet uel is consummated or the purpose o a sales tax imposed b an

ordinance adopted pursuant to this part is the point o the deliver o that jet uel to the aircrat.

There is no change to the multijurisdictional airport allocation methods. In the case o a multijurisdictional airport

(the airport that is owned or operated b a jurisdiction dierent rom where the airport is located), hal o the

revenue goes to the cit or count that owns or operates the airport and the remaining hal to the cit or count in

which the airport is located. See special rules which appl onl to San Francisco International and Ontario Interna

tional airports.

Regulation 1802(b)(7) provides speciic details regarding the proper allocation o the local sales tax on jet uel. Visit

www.boe.ca.govor the ull text o the statute and regulation.

Construction Contracts over $5 Million

Under a Board resolution adopted in 1994, an installing construction contractor or subcontractor ma elect to

obtain a subpermit or the job site o a contract valued at $5,000,000 or more. This option provides local jurisdic

tions the opportunit to receive the local tax on materials consumed and ixtures urnished b the contractor

directl, rather than through the countwide pooling process. It is important to note that participation b contrac

tors is strictl voluntar. This is a complex subject, and i ou have questions, ou should contact our Local Revenue

Allocation Unit or assistance at 9163243000.

Auctioneers

For purposes o allocating the local tax, the place o sale or auctioneers is the place where the auction is held. I

the auction is held at a location other than the auctioneers registered place o business, the ollowing allocation

guidelines should be used:

Taxableauctionsalestotaling$500,000ormorepereventlocaltaxisreporteddirectlytothejurisdictionwhere the auction occurs on schedule BOE530, Schedule CDetailed Allocation by Suboutlet of Uniform Local

Sales and Use Taxcombined one percent state and local tax allocation or sales locations.

Taxableauctionsalestotalinglessthan$500,000pereventlocaltaxisreportedtothecountywidepoolwhere the auction occurson BOE531, Schedule BDetailed Allocation by County of 1 Percent Combined State

and Uniform Local Sales and Use Tax.

Sales or Purchases o $500,000 or More Subject to Use Tax

Generall, interstate sales made b outostate retailers to Caliornia consumers are subject to use tax unless

otherwise exempt. The local use tax on such interstate sales into Caliornia is usuall reported opposite the count

to which the goods are shipped. However, outostate retailers who are engaged in business in this state and col

lect use tax on single interstate sales o $500,000 or more, must report the local use tax to the speciic jurisdiction
http://www.boe.ca.gov/pdf/reg1802.pdfhttp://www.boe.ca.gov/pdf/reg1802.pdfhttp://www.boe.ca.gov/http://www.boe.ca.gov/pdf/boe530.pdfhttp://www.boe.ca.gov/pdf/boe531.pdfhttp://www.boe.ca.gov/pdf/boe531.pdfhttp://www.boe.ca.gov/pdf/boe530.pdfhttp://www.boe.ca.gov/http://www.boe.ca.gov/pdf/reg1802.pdf


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MARCH 201110

in which the irst unctional use o the propert occurs rather than through the countwide pool. This generall is

presumed to be the jurisdiction to which the goods are shipped. This applies to use tax onl and not to sales tax

transactions.

Persons who selreport or retailers who purchase tangible personal propert o $500,000 or more per transaction

rom sellers who are not required to collect the tax must report the local use tax to the jurisdiction where the prop

ert is irst unctionall used.

For purchases o vessels or aircrat, the BOE obtains purchase inormation rom the United States Coast Guard,Federal Aviation Administration, or Count Assessors. The Consumer Use Tax Section bills the use tax based on the

inormation received. For purchases o $500,000 or more per transaction, the local use tax is allocated to the juris

diction where the propert is irst unctionall used.


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MARCH 2011


ScHEDulES uSED FoR REPoRtinG tHE coMbinED onE PERcEnt

StatE anD local tax allocation

Statewide or Countwide Pool Allocations (Schedule B)

Some taxpaers are authorized to report their local tax either on a statewide or countwide pool basis. These

taxpaers are issued an additional schedule, BOE531, Schedule BDetailed Allocation by County of Combined State

and Uniform Local Sales and Use Tax, with their sales and use tax return. Schedule B lists each count within the state

o Caliornia, and sales or use tax should be entered opposite the count o sale or use, as provided b statute or

regulations. At the end o each reporting quarter, the countwide pool totals are prorated, irst among the cities,

the redevelopment areas, and the unincorporated area o each count using the proportion that the identiied tax

or each cit and unincorporated area o a count bears to the total identiied or the count as a whole. Next, the

combined total o the direct allocation and the prorated countwide pool amount is used to allocate the statewide

pool amount to each cit, redevelopment area, and count (see Exhibit C).

Allocations or Multiple Business Locations (Schedule C)

Taxpaers report the amount o local tax paable or each registered business location. When a taxpaer has retail

outlets in more than one local jurisdiction, the are issued a subpermit for each additional location and are instructedto file an additionalschedule, BOE530, Schedule CDetailed Allocation by Suboutlet of CombinedState and Uniform

Local Sales and Use Tax, with the sales and use tax return. Using this schedule, the taxpaer allocates the one percent

combined state and local tax generated at each location. The 1/4 percent count transportation portion o the local

tax rate is allocated automaticall b us based on the local tax allocation inormation provided b the taxpaer.

Additional Special Allocation ProceduresUse Tax (Schedule F)

Some taxpaers are required to report local use tax to jurisdictions where the are not directl engaged in business.

Examples include lessors o motor vehicles acquired rom a new motor vehicle dealer, persons making sales or pur

chases in interstate commerce totaling $500,000 or more per transaction, and purchasers who selreport the use

tax on goods purchased rom sellers who are not registered to collect the tax when the purchase price is $500,000

or more. In the irst case, the taxpaer identiies the cit, count, or cit and count o the new motor vehicle dealerrom whom the vehicle was acquired; and in the second and third instances, the taxpaer identiies the jurisdiction

where the irst unctional use o the propert will occur (generall deemed to be the place in Caliornia where the

goods are delivered). These taxpaers are issued a BOE531F, Schedule FDetailed Allocation by City of 1% Combined

Uniform Local Sales and Use Tax, or reporting the above examples.
http://www.boe.ca.gov/pdf/boe531.pdfhttp://www.boe.ca.gov/pdf/boe530.pdfhttp://www.boe.ca.gov/pdf/boe531f.pdfhttp://www.boe.ca.gov/pdf/boe531f.pdfhttp://www.boe.ca.gov/pdf/boe530.pdfhttp://www.boe.ca.gov/pdf/boe531.pdf


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tax aGREEMEntS aMonG local JuRiSDictionS

Sharing Local Tax rom Taxpaers

True revenue sharing means the sharing o local tax revenues ater the have been distributed. Article XIII, Section 29,

o the Caliornia Constitution authorizes cities and counties to enter into revenue sharing agreements as ollows:

(a) The Legislature may authorize counties, cities and counties, and cities to enter into contracts to apportion between

them the revenue derived from any sales or use tax imposed by them which is collected for them by the State. Before

any such contract becomes operative, it shall be authorized by a majority of those voting on the question in each juris

diction at a general or direct primary election.

(b) Notwithstanding subdivision (a), on and after the operative date of this subdivision, counties, cities and counties,

and cities may enter into contracts to apportion between them the revenue derived from any sales or use tax imposed

by them pursuant to the BradleyBurns Uniform Local Sales and Use Tax Law, or any successor provision, that is col

lected for them by the State, if the ordinance or resolution proposing each contract is approved by a twothirds vote of

the governing body of each jurisdiction that is a party to the contract.

As an example, a business that is located in one jurisdiction draws its customer base rom a neighboring jurisdic

tion. The local jurisdictions involved ma wish to split the revenues generated at this location.

B contrast, a retail establishment ma straddle a border with sales being made in more than one jurisdiction. In

this case, the neighboring jurisdictions ma agree to divide the revenues or this location based on the percentage

o sales occurring at each place. A separate subpermit is issued or the same location in each jurisdiction, and the

local tax is allocated accordingl. This is not considered revenue sharing, but simpl a clariication o place o sale.

Deaulting Local Tax rom Cit to Count

Cities oten make agreements to pa or services provided b the respective count b providing a percentage o

the cits local tax that we pa directl to the count. This is done inlieu o writing a check to the count.

A cits local tax ma be imposed up to one percent (beore 0.25 percent reduction per Section 7203.1). All ordi

nances should be based on a one percent local tax rate and we will handle the 0.25 percent reduction per section

7203.1 administrativel. A cit may adoptan ordinance to impose a local tax rate o less than one percent which will

result in the cit deaulting the balance o the one percent rate to the count in which the cit is located. A cit ma

amend its existing ordinance to reduce the local sales and use tax rate b the amount that will be deaulted to the

count. Or a cit (usuall a new one) ma enact a new ordinance setting its tax rate at less than one percent at the

outset. In either case, the cit must enact an ordinance reducing the local sales and use tax rate b the amount that

will be deaulted to the count. For example, Cit A, which is located in Count B, currentl received 100 percent o

the one percent local tax imposed in that cit. The new ordinance states that Cit A will receive 95 percent o the

local tax, and Count B will receive ive percent. As a result, the cits rate would be 0.95 percent, and the counts

0.5 percent. In addition to a certiied cop o the cits ordinance, we require a cop o the counts ordinance or

other conirming document.


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MARCH 201114

uSinG tax aREa coDES to DiStRibutE local taxES

Role o Tax Area Codes

Accurate tax area coding is critical to the allocation process because it is the basis or distributing tax revenue

collected to the place o sale or use. Each cit, cit and count, count, special taxing district, and redevelopment

area is identiied b a 12digit area code assigned to the business address. Our area code specialists veri business

addresses with maps provided b the cities and counties to ensure that proper tax area codes are assigned. Busi

ness addresses that cannot be properl identiied b the use o available maps are researched urther with the aid

o propert tax parcel maps and local jurisdiction representatives.

Example A

Sample Tax Area Code

34 004 023 0020

Count Code Redevelopment

(Sacramento) Area Code(Galt Redevelopment

Project)Cit Code

(Galt)Special Taxes District

(Sacramento Transportation Authority)

Tax Area Code Structure

The tax area code identiies the count and cit in which a business is located, as well as the special taxing district(s)

and redevelopment area, i applicable. Above is an example o the 12digit tax area code or an area within the Cito Galt.

To avoid incorrect allocation o revenue, cities and counties should bring questionable tax area coding items to our

attention to establish a date o knowledge as soon as possible. Since the law prohibits redistribution o misallo

cated local unds beond three quarterl periods preceding the date o knowledge o the misallocation, prompt

notiication is essential.

Date o Knowledge or Redistribution o Local Sales and Use Tax

Section 7209 o the BradleBurns Uniorm Local Sales and Use Tax Law provides as ollows:

The Board may redistribute tax, penalty, and interest distributed to a county or city other than the county or city entitled

thereto, but such redistribution shall not be made as to amounts originally distributed earlier than two quarterly periodsprior to the quarterly period in which the BOE obtains knowledge of the improper distribution.

A date o knowledge (DOK) o improper distribution can be established using either o the ollowing two methods:

1. We receive a petition or reallocation or redistribution rom a jurisdiction or investigation o suspected improper

distribution o local tax. Generall, such inquiries are sent directl to our Allocation Group. For more inormation

on petitions or reallocations or redistribution, see the section,

,

Submitting Petitions for Reallocation or Redistribu

tion/Date of Knowledge in this publication.


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MARCH 2011|


2. One o our emploees discovers actual inormation suicient to support the probabilit that an erroneous

allocation o local tax ma have occurred, and that allocation is questioned. A DOK is established when the

emploee questions the allocation. Since we review taxpaer returns when iled, we ma identi probable erro

neous allocations beore the tax amount is distributed.

Local governments should maintain written evidence that notice o improper distribution was provided to us.

Accordingl, we recommend that inquiries into suspected improper distributions be mailed or axed to our Alloca

tion Unit. Their address and telephone number can be ound at the back o this publication.

When we veri improper distributions, redistributions ma be processed or amounts originall distributed no

more than two quarterl periods beore the quarterl period in which we establish a DOK. Since local tax is gen

erall distributed during the quarter ollowing the period or which tax is reported, redistributions are usuall

processed or the three quarters immediatel preceding the quarter in which the DOK is established.

For example, Cit A notiies us in a letter received on March 15, 2009, that Taxpaer X opened a business in that cit

in Februar 2008, but no tax has been allocated to that cit rom that taxpaer. We investigate Cit As inquir, ind

that the cit is correct, and that this taxpaers local tax has been improperl allocated to Cit B. The investigation

is completed on April 2, 2009. Although the veriication is not made until the second quarterl period, the date o

knowledge (March 15) is in the irst quarterl period. Accordingl, we will redistribute (reallocate) the local tax rom

Cit B to Cit A or the second, third, and ourth quarters 2008. Although the business opened prior to 2007, section

7209 prohibits the reallocation o local tax or that period because the tax was distributed more than two quarters

earlier.

For additional inormation regarding procedures or submitting petitions or reallocation, please see the section,

Submitting Petitions for Reallocation or Redistribution/Date of Knowledge, in this publication.

Please note: We understand that this is a complex area o the law and that ou ma have questions and comments.

Please contact our Local Revenue Allocation Unit i ou wish to obtain more inormation.

Assembl Bill (AB) 990Eective Januar 1, 2000

Assembl Bill 990a collaborative eort o the BOE, the Caliornia State Association o Counties, and the League

o Caliornia Citiesadded section 6066.3 to the Revenue and Taxation Code to develop an eicient and eective

working relationship in the review, posting, and correction o local tax records. Section 6066.3 authorizes each cit,

count, and cit and count to collect inormation rom persons desiring to engage in business in that jurisdiction

or the purposes o selling tangible personal propert and transmit that inormation to the BOE. The inormation

submitted serves as:

Apreliminaryapplicationforasellerspermit Notificationtousbythelocaljurisdictionofapersondesiringtoengageinbusinessinthatjurisdictionfor

the purposes o selling tangible personal propert, and

Noticetousforpurposesofredistributionundersection7209.(Seein this publication.)

Submitting Petitions for Reallocation or

Redistribution/Date of Knowledge

Procedures established to enable local jurisdictions to participate in the process are summarized below:

1. The local jurisdiction contacts the ield oices Principal Compliance Supervisor to enroll in the program.

2. Once enrolled, the local jurisdiction is provided with the ollowing:

a. Computer sotware to acilitate the AB 990 program.

b. The name, telephone number, and email address o our district contact person.

c. Instructions or submitting a request or taxpaer registration.

d. Instructions or submitting a notiication o suspected misallocated local tax.

e. An email address to be used or submitting requests.


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MARCH 201116

3. The local jurisdiction is also scheduled to receive the monthl Statewide Registration CDROM or open and

closed permits.

Occasionall, locals ma ind a business with the same start date and closeout date on the Registration CDROM.

I the last position on the registration record contains a T, the permit was issued to a temporar seller. No action

is necessar i there is no Tour records will show that the business did not operate. I the local jurisdiction has

actual inormation to support the position that the business did indeed operate, a petition on BOE549S,Claimed

Incorrect Distribution of Local Tax Shor t Form, or BOE549L, Claimed Incorrect Distribution of Local Tax Long Form,

describing the basis o the suspected misallocation should be submitted to the Allocation Group in Sacramento.

See the section, Submitting Petitions for Reallocation or Redistribution/Date of Knowledge, or more inormation.

AB 990 is not intended to replace the petition procedures alread provided or under Regulations 1807 and 1828.

For additional inormation regarding AB 990, please contact our local ield oice. For a list o the BOE ield oices,

visit www.boe.ca.gov.
http://www.boe.ca.gov/pdf/reg1807.pdfhttp://www.boe.ca.gov/pdf/reg1828.pdfhttp://www.boe.ca.gov/info/phone.htmhttp://www.boe.ca.gov/http://www.boe.ca.gov/http://www.boe.ca.gov/info/phone.htmhttp://www.boe.ca.gov/pdf/reg1828.pdfhttp://www.boe.ca.gov/pdf/reg1807.pdf


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MARCH 2011|


DiStRict tRanSactionS (SalES) anD uSE taxES

District Taxes

District taxes are additional transactions (sales) and use taxes imposed within special taxing districts according to

the Transactions and Use Tax Law o the Revenue and Taxation Code. The are reported on BOE531A2, Schedule

AComputation Schedule for District Tax.The words transaction and transactions as used in that law have the

same meaning respectivel as the words sale and sales in the Sales and Use Tax Law. District taxes are imposedthrough voter approved ordinances adopted b the districts governing boards. Sections 7285 and 7285.5 o the

Revenue and Taxation Code authorize counties to lev transactions and use taxes under speciied conditions. In

2004, sections 7285.9 and 7285.91 were added authorizing cities to lev transactions and use taxes under speciied

conditions.

The proceeds rom district taxes ma be used or transportation or other government services, but the intended use

o the tax dollars must be speciied in the ordinance submitted to the voters. Currentl, district tax rates range rom

0.10 percent to one percent. Some cities and counties have more than one district, resulting in a combined district

tax rate o up to two percent and in certain cities in Los Angeles Count, 2.50 percent.

Assembl Bill (AB) 1748Eective Januar 1, 2008

Date of Knowledge

Assembl Bill 1748 added section 7269, which is equivalent to section 7209 o the BradleBurns Uniorm Local

Sales and Use Tax Law, Regulation 1828, Petitions for Distributions or Redistribution of Transactions and Use Tax

provides that, or redistributions where the date o knowledge (DOK) is prior to Januar 1, 2008, the standard

threeear statue o limitations is applicable. For redistributions where the DOK is on or ater Januar 1, 2008, redis

tributions shall not include amounts originall distributed earlier than two quarterl periods prior to the quarter o

the DOK.

Administrative Dierence between Local Sales and Use Tax and Transactions and Use Tax

There is one major distinguishing dierence between local sales and use tax and the transactions and use tax laws.

Place of Sale

Under the BradleBurns Uniorm Local Sales and Use Tax Law, most retail sales are deemed to occur at the retailers

place o business in this state where the sale is negotiated. (Exceptions ma include certain auctioneers, vending

machine operators, and construction contractors). I the retailer has more than one place o business in this state,

the sale is deemed to occur at the location where the principal negotiations take place. Generall, the combined

one percent state and local sales tax portion o the statewide 8.25 percent sales and use tax is allocated to the

jurisdiction where the retailers place o business is located, and the local use tax is generall allocated through the

countwide pool where the propert is used.

For purposes o distributing the district tax, the tax generall ollows the merchandise. That is, the tax is generall

distributed to the district where the goods are delivered (and presumabl used.) District tax distributions are, there

ore, aected b the deinition oplace of sale, which relies on the ollowing actors that also determine i district taxis applicable. I the conditions in (a) are not met, the retailer should look at (b) to see i he or she must collect and

report the use tax.

a. Transactions (Sales) TaxThe retailer has a business location in the district, and the sale and deliver occur at

that location.

b. District Use Tax

Theretailerisengagedinbusinessinthedistrict.
http://www.boe.ca.gov/pdf/boe531a2.pdfhttp://www.boe.ca.gov/pdf/boe531a2.pdf


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MARCH 201118

Theretailerhasanykindofrepresentativeoperatinginthedistrictforpurposesofmakingsalesordeliveriesor or taking orders.

Theretailerderivesrentalsfromaleaseoftangiblepersonalpropertyinthedistrict.Theretailersellsorleasesvehicles,undocumentedvessels,oraircraftthatwillberegisteredinthedistrict.

Dierences in the Application o Local Sales and Use Tax and the Transactions and Use Tax

Occasionall, representatives o local jurisdictions attempt to draw a correlation between local sales and use tax and

the transactions and use tax revenues collected in their cit and/or count. Since the actors determining whethera transaction is subject to local sales and use tax dier rom those that indicate whether the same transaction is

subject to transactions and use tax, it is not alwas possible to establish a direct correlation between the two. The

ollowing examples illustrate the taxabilit o certain sample transactions.

IfasellerhasaplaceofbusinessinthecityofSacramento,whichisintheSacramentoTransportationAuthorit (STAT) district, and makes overthecounter sales, the seller is liable or STAT district transactions tax, and

local sales tax is allocated to the place o business (Sacramento).

Ifanin-statesellerislocatedoutsidetheSTATdistrict(inVallejo,forexample)buthasagentsinthedistrictwho make sales to customers in the district, the seller must report the STAT district use tax. Local sales tax is

generall allocated to sellers instate location (Vallejo).

Ifasellerhasnoin-statelocationandnoin-stateinventoryofgoods,butsalespersonnelcalloncustomersinthe STAT district, the seller is liable or STAT district use tax. The local use tax is allocated through the count

wide pool to local jurisdictions in the count o deliver (Sacramento).

IfasellerhasaplaceofbusinessinthecityofSacramento,whichisintheSTATdistrict,butshipspropertyaccording to a contract o sale to a purchaser in Placer Count, which currentl has no district tax, generall

district tax does not appl, and local sales tax is allocated to the cit o Sacramento.

IfasellerhasaplaceofbusinessinthecityofSacramento,whichisintheSTATdistrict,butshipspropertyviacommon carrier according to a contract o sale to a purchaser in the cit o Anaheim, which is in the Orange

Count Transportation Authorit (OCTA) district, the seller is not considered to be engaged in business in

OCTA and is not liable or an district tax. The local sales tax is allocated to the cit o Sacramento. The pur

chaser must selreport OCTA use tax.

For additional inormation regarding district taxes, see sales tax publication 44, District Taxes, which can be ound on

the BOE websiteor b calling our Taxpaer Inormation Section at 8004007115.
http://www.boe.ca.gov/pdf/pub44.pdfhttp://www.boe.ca.gov/pdf/pub44.pdfhttp://www.boe.ca.gov/http://www.boe.ca.gov/http://www.boe.ca.gov/http://www.boe.ca.gov/pdf/pub44.pdf


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MARCH 2011


MEtHoD oF PaYMEnt

Method o Computing Local Tax Paments

To maintain a reliable and stead cash low to the cities, counties, and special districts, we distribute quarterl tax

revenues using the ollowing method:

Using the prior ears quarterl tax allocation as a starting point, we irst eliminate nonrecurring transactions such

as und transers, audit paments, and reunds. Then we adjust or growth and the state tax in order to establish the

estimated base amount. We distribute 90 percent o the base amount to each local jurisdiction in three monthl

installments (advances) prior to the inal computation o the quarters actual receipts. We withhold ten percent as

a reserve against unexpected occurrences that can aect tax collections (or example, earthquake, ire, or other

natural disaster) or distributions o revenue such as unusuall large reunds or negative und transers. The irst and

second advances each represent 30 percent o the 90 percent distribution, while the third advance represents 40

percent. One advance pament is made each month, and the quarterl reconciliation pament (cleanup) is dis

tributed in conjunction with the irst advance or the subsequent quarter. Statements showing total collections,

administrative costs, state tax adjustment, prior advances, and the current advance are provided with each quar

terl cleanup pament. Statements can be ound at www.boe.ca.gov.

A worksheet or computing a local jurisdictions quarterl advance, Quarterly Advance Worksheet, isExhibit D in this

publication.

Report Earl on Signifcant Business Changes

To ensure that advances relect actual activities as closel as possible, local jurisdictions should advise our Local

Revenue Allocation Unit o an new retailers or shopping malls opening that ma signiicantl impact the advances.

Similarl, the closing (or relocation to another jurisdiction) o an large retailer should be brought to our attention

to avoid overpament o advances. Our Local Revenue Allocation Unit ma be contacted b calling 9163243000 or

b email at [email protected].
http://www.boe.ca.gov/mailto:ewgroup%40boe.ca.gov?subject=mailto:ewgroup%40boe.ca.gov?subject=http://www.boe.ca.gov/


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MARCH 201120

annual allocation calEnDaRlocal anD DiStRict taxES

Annual Allocation Calendar

Each ear we post the Local and District Tax Allocation Calendar on www.boe.ca.gov. Starting with 2010, the Allo

cation Calendar will have a new look and we are adding a new calendar, Return Period Calendar. Below ou will

ind examples: Table 5a,Allocation Calendar for 2010, and Table 5b, Return Period Calendar. An explanation o each

column o inormation is provided on the ollowing pages.

Table 5a

Allocation Calendar for

Bradley-BurnsLocalTaxTransactionsandUseTaxesWarrant/EFT Payments Media

Reporting Period

and Due Date

Statement

Allocation

Period

Allocation

Periods for

Cleanup

Statement

Release

Date

Warrant Issue

EFT

Settlement

Date

Reporting Period

and Due Date

Allocation

Period

October 2009

113009

121209

to011410

011110 012010

October 2009

113009

111409

to121109

November 2009

123109

011510

to

021110

020510 021710November 2009

123109

121209

to

011410

December,

year

4th Quarter 2009

013110

021210

to

031110

111409

to

021110

031810 032610

December,

year

4th Quarter 2009

013110

011510

to

021110

Ever eort will be made to make each pament on the scheduled date. However, unoreseen circumstances ma result in changes.

Table 5b

Return Period Calendar for

Warrant/EFT Payments Media

Reporting Period

and Due Date

Advance

Period

Calendar

Quarter

Return

Period for

Cleanup

Statement

Release

Date

Warrant Issue

EFT

Settlement

Date

Reporting Period

and Due Date

Return

Period

October 2009

113009

November

2009

2nd Advance

011110 012010October 2009

113009

October 2009

November 2009123109

December

2009

3rd Advance

4th Quarter2009

October

2009

to

December

2009

020510 021710 November 2009123109

November 2009

December,

year

4th Quarter 2009

13110

Januar

2010

1st Advance

031810 032610

December,

year

4th Quarter 2009

13110

December 2009
http://www.boe.ca.gov/http://www.boe.ca.gov/


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Reporting Period and Due Date

Generall, sales and use tax is reported on a monthl, calendar quarterl, calendar earl, or iscal earl basis.

Although some taxpaers have received authorization to report their taxes on an irregular quarterl reporting

period to accommodate their accounting ccle, the ollowing explanation applies to taxpaers iling on regular

reporting periods.

Monthl reporting periods are selexplanator. yearl reporting periods ma be based on the calendar ear

(Januar 1 though December 31) or iscal ear (Jul 1 through June 30). Quarterl periods cover the ollowing dates:1st quarter: Januar 1 through March 31

2nd quarter: April 1 through June 30

3rd quarter: Jul 1 through September 30

4th quarter: October 1 through December 31

Monthly tax returns must be iled (postmarked) on or beore the last da o the month ollowing the month or

which the tax is due. For example, tax returns or the month o Ma must be iled on or beore June 30.

Quarterly tax returns must be iled (postmarked) on or beore the last da o the month immediatel ollowing the

quarterl period. For example, tax returns or the irst quarter (Januar through March) must be iled on or beore

April 30.

Yearly tax returns must be iled (postmarked) on or beore the last da o the month ollowing the end o the ear or

which the tax is due. For taxpaers whose reporting ear ends December 31, the return must be iled on or beore

Januar 31 o the ollowing ear. Taxpaers reporting on a iscal ear basis (iscal ear ending June 30) should ile

their returns on or beore Jul 31.

Please note: Return iling due dates that all on weekends or state holidas will automaticall be extended to the

next business da. The majorit o the largest taxreporting businesses are located out o state; consequentl, tax

returns rom these taxpaers, even though postmarked b the iling date, oten do not reach our Sacramento Head

quarters until ive to seven calendar das rom mailing.

Taxpaers whose estimated taxable measure averages $17,000 or more per month are generall required b law to

make monthl prepaments. For local tax purposes, however, prepaments cannot be allocated until the quarterlreturn is iled, since the return contains the speciic allocation inormation.

Use Tax Reported on Franchise Tax Board (FTB) Return

I a taxpaer has under $100,000 in gross receipts the ma report the use tax on their annual state tax return, to the

State o Caliornia, due April 15th each ear. The local tax will be allocated to the jurisdiction via countwide pool. I

the taxpaer has purchases over $500,000, the local tax will be reported to the cit o use.

Media Allocation Periods

Each month, registration and allocation reports are provided to qualiied local jurisdictions using a variet o

ormats, or media (or example, CDROM and paper). In an eort to provide adequate time or our sta to make

manual adjustments to tax returns and still process the returns as expeditiousl as possible, we have assignedmonthl allocation periods that roughl correspond to the midmonth points or each monthl reporting period.

In this manner, we can promptl allocate local tax reported on returns that are received up to two weeks beore the

due date, as well as those that are received up to two weeks ater the due date. This means, or instance, that the

allocation period or returns due on or beore June 30 is June 12 through Jul 14. This method is used or monthl

allocations onl.
http://www.ftb.ca.gov/http://www.ftb.ca.gov/


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MARCH 201122

Statement Allocation Periods

We are required b statute to distribute sales and use tax revenues to local jurisdictions at least twice in each calen

dar quarter. However, in order to ensure a stead cash low to local governments, we make ever eort to distribute

these unds on a monthl basis using the advance method o paments described in the previous section, Method

of Payment. Advances are distributed to local jurisdictions and special tax districts based on periods identical to

Media Allocation Periods (see the previous paragraph).

In the sample calendars in Tables 5a and 5b, the date 21710 in the column labeled Warrant Issue EFT SettlementDate corresponds to the Statement Allocation Periodcolumn date 21210 to 31110. This means that the advance

pament distributed to local jurisdictions and special districts on Februar 17, 2010, represents the estimated tax

revenues collected or the return month o December (returns due on or beore Januar 31, 2010).

Allocation Periods or Cleanup

As discussed in the section, Method of Computing Local Tax Payments, the cleanup pament is the reconciliation

between the total o the three advance paments and the actual collections (less the state tax per section 7203.1

and administrative ee) or an given quarterl return period. Accordingl, the column labeledAllocation Periods for

Cleanup displas a ull quarterl (threemonth) time span. The dates representing the quarterl cleanup period cor

respond to the monthl dates or the months occurring in that quarter.

Statement Release Date

This date is the date on which inormation regarding advance and/or cleanup paments should be available. Local

jurisdictions and special tax districts desiring to view their statement on our website ma do so after this date.

Warrant IssueEFT Posting Date

On this date, warrants or advances and/or cleanup paments are mailed b the State Controllers Oice or depos

ited b Electronic Funds Transer (EFT) to the local jurisdictions account.

Local jurisdictions can view their current statement o pament on our website, https://efile.boe.ca.gov/

boewebservices/localJur.jsp.Click on the indicator opposite our jurisdiction categor (cit or count, count,

redevelopment agenc, or district) and enter the correct code in the box oppositeJurisdiction Code. Click on Submit

Request, and our statement will be displaed. An alphabetical listing o jurisdiction codes will be available at the

bottom o the page.

It is ver important to keep the BOE inormed about banking inormation changes. I the banking inormation is

changing then it is important to keep the original bank account opened or at least 60 das ater notiing the BOE

o the changes. The BOE also needs to be aware o an address changes in the event it becomes necessar to mail a

paper warrant.

you can also download allocation calendars or the current and next calendar ear b clicking on the hperlink at

the bottom o the Local Jurisdiction Statementinquir page.
https://efile.boe.ca.gov/boewebservices/localJur.jsphttps://efile.boe.ca.gov/boewebservices/localJur.jsphttps://efile.boe.ca.gov/boewebservices/localJur.jsphttps://efile.boe.ca.gov/boewebservices/localJur.jsphttps://efile.boe.ca.gov/boewebservices/localJur.jsphttps://efile.boe.ca.gov/boewebservices/localJur.jsphttps://efile.boe.ca.gov/boewebservices/localJur.jsp


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uSinG REGiStRation Data to EnSuRE coRREct allocation

Use o Registration Data Provided b the BOE

When a cit, cit and count, or count contracts or state administration o local sales and use tax, the BOE creates,

or that jurisdiction, registration data listings or all sellers within the local jurisdiction. Upon request, and ever

month thereater, each jurisdiction ma receive registration updates or an additions, deletions, address changes,

and other changes processed b the BOE on CDROM (see Exhibit E, Media Registration orm).

Registration data provided to local jurisdictions is conidential and ma onl be examined b a jurisdictions

emploee or representative (consultant) authorized b a resolution o the legislative bod o that jurisdiction under

section 7056.

Veriing Tax Area Codes

Local jurisdictions should use the registration data to veri the accurac o tax area codes assigned to each account

since an incorrect tax area code results in the misallocation o the local tax generated b that account. I errors are

noted, our nearest ield oice should be notiied to review the taxpaers ile and make an necessar corrections.

Cities and counties that have street range listings or their jurisdictions can assist us b providing that inormation

to our Local Revenue Allocation Unit. This inormation can be used to identi jurisdictions or the business loca

tions in order to assign the correct tax area codes. This same inormation is particularl helpul or jurisdictions that

have streets crossing boundaries with neighboring jurisdictions or or streets that orm jurisdictional borders.

Identiing Unregistered or Unlicensed Businesses

We encourage cities and counties to compare their business license records with our registration records to deter

mine i businesses located within their boundaries are registered with us and operating with the appropriate local

business licenses (Exhibit F). It is important to note that sellers permits contain the ollowing inormation:

Taxpayersname(andDBA,ifapplicable) Businessaddress Permit(account)number

Permits do not include local jurisdiction tax area code inormation, and, in man cases, business address inorma

tion can be misleading. For example, a business address ma indicate a postal deliver location in the cit o San

Diego, but the actual location ma be outside the cit limits. The act that the local tax would correctl be allocated

to the unincorporated area o the count o San Diego is not discernible rom the address onl.

Local tax allocation inormation is included on the application or a sellers permit, as well as on the taxpaers sales

and use tax return. Local jurisdictions ma request copies o these documents rom the taxpaer when registering

them or a new business license to ensure correct local tax allocation. Local jurisdictions should noti their local

ield oice regarding businesses (potential taxpaers) operating without a state sellers permit so that we can regis

ter them and subsequentl distribute the correct local tax revenue to the proper jurisdictions. Beore notiing us o

suspected problems, cities and counties should clari whether:

Thebusinessisoperatingfromalocationwithinthecitylimitsorunincorporatedareaofthecounty,and Ifthebusinessismakingsalesoftangiblepersonalpropertythataresubjecttosalesorusetax.

In addition, it is helpul to provide us with the name, telephone number, and mailing address o the business con

tact person or ollowup procedures. Jurisdictions ma wish to enroll in the AB 990 program discussed earlier to

noti the local ield oices o potentiall unregistered sellers.


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MARCH 201124

tEMPoRaRY SEllERS, SPEcial EvEntS, anD tRaDE SHowS

Temporar sellers permits are generall issued to selling operations o a temporar nature, that is, lasting no more

than 90 das at one location. Examples o such operations include rummage sales, Christmas tree lots, and ireworks

stands. While these sellers are not required to hold a permanent sellers permit, the are required to hold a tem

porar permit so as to collect and pa the appropriate sales and use tax. Local jurisdictions should monitor these

activities closel to ensure proper reporting o state and local taxes.Sellers who are registered with permanent places o business occasionall occup temporar locations in other

jurisdictions. For example, a new car dealership registered in one cit ma participate in a multidealer sales event,

like a parkinglot sale at an osite location in another cit. The local sales tax generated at the temporar location

should be allocated to the jurisdiction where the event occurs. The temporar location should be added to the

taxpaers Schedule C.This orm can be obtained rom the BOE website or b contacting the Taxpaer Inormation

Section at 8004007115.

Other special events include swap meets, airs, lea markets, and similar activities where sales o tangible personal

propert occur. Operators o special events are required to veri that each sellerparticipant is the holder o a valid

sellers permit or to obtain a written statement rom the seller stating that he or she is not selling an item that is

taxable. Local jurisdictions should veri that the local tax derived at these events is properl reported.

Outostate retailers who participate in conventions and trade shows are not required to collect use tax on sales

made subsequent to the event i the ollowing conditions are met:

In-stateconventionandtradeshowparticipationdoesnotexceed15daysina12-monthperiod,andThesellerdoesnotderivemorethan$100,000ofnetincomefromeventactivitiesduringthepriorcalendar

ear.

However, all sales occurring at such an event are subject to the use tax when there is a sale o tangible personal

propert and the goods are shipped to the customer rom an outostate inventor.

Notiing New Businesses o Sellers Permit Requirements

Cities and counties can also assist in encouraging businesses to appl or a permit at an earl date b notiing busi

ness license applicants that their business activities ma require them to hold a sellers permit. Such notiication can

be accomplished in several was. For example, a notice ma be added to the application or a business license, or a

cop o our publication 107, Do You Need a California Sellers Permit?ma be distributed to applicants. Copies o pub

lication 107 ma be obtained rom our website under the Forms & Publications b selecting theAll Publications link.

I a notice is added to the application or business license, the law requires that the ollowing language be used:

Sales or use tax may apply to your business activities. You may seek written advice regarding the application of tax to

your particular business by writing to the nearest BOE office.

Use o Allocation Data

In addition to the registration data we provide, local jurisdictions ma also request rom us a list o the local taxdollars distributed to the jurisdiction rom taxpaers returns. The ma also request allocation data relating to the

countwide and statewide pools or their count. I the do so, it is recommended that the also order registration

data or purposes o crossreerencing unamiliar account numbers. Local jurisdictions tpicall monitor this data or

questionable tax allocations, unusual dollar amounts, or missing allocations or und transers. The data is also useul

as a budgeting tool.

The Top25 Listis another tpe o allocation report available to ou. This report lists, in alphabetical order b busi

ness name, the top 25 retailers with ongoing business activities located within the jurisdictions. you can request it

rom our Local Revenue Allocation Unit b calling 9163243000.
http://www.boe.ca.gov/pdf/pub107.pdfhttp://www.boe.ca.gov/pdf/boe530.pdfhttp://www.boe.ca.gov/http://www.boe.ca.gov/pdf/pub107.pdfhttp://www.boe.ca.gov/http://www.boe.ca.gov/formspubs/index.htmhttp://www.boe.ca.gov/cgi-bin/pubs.cgihttp://www.boe.ca.gov/cgi-bin/deliq.cgihttp://www.boe.ca.gov/cgi-bin/deliq.cgihttp://www.boe.ca.gov/cgi-bin/pubs.cgihttp://www.boe.ca.gov/formspubs/index.htmhttp://www.boe.ca.gov/http://www.boe.ca.gov/pdf/pub107.pdfhttp://www.boe.ca.gov/http://www.boe.ca.gov/pdf/boe530.pdf


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accESS to boE REcoRDS

Procedure to Obtain Access to BOE Records

Section 7056 o the Revenue and Taxation Code provides that i an count, cit and count, cit, or district wishes

to examine sales, transactions, and use tax records to ascertain the taxes collected or that jurisdiction according to

a contract between the BOE and that jurisdiction, it must adopt a resolution authorizing one or more o its oicials,

emploees, or other designated person to examine those records. When adopting the required resolution, jurisdic

tions are encouraged to adhere to the ollowing guidelines:

Listallpositions that need access to conidential sales and use tax records. Remember that we can provideconidential inormation onl to those named in the resolution. (We suggest that position titles onl rather

than individual names be authorized in order to allow or personnel changes.)

Theresolutionmaygrantauthoritytoaspecificofficial(bypositionratherthanname)givingthatofficialtheright to designate other oicials b written notice. Using the position designation option avoids the need to

adopt a new resolution each time authorized personnel are added or deleted.

Whenaconsultantisdesignated,section1shouldincludeanofficialwhoisauthorizedtoreceiveconfidentialinormation rom the consultant.

Section2ofthesampleresolutionisintendedtoauthorizeaccesstoconfidentialsalesandusetaxinformation or specificgovernmental unctions other than the routine review o records to ascertain local tax

allocation (which is authorized in section 1). The speciic governmental purpose(s) must be stated in the

resolution.

Rescindanyandallpriorresolutionswhenadoptinganewresolution,unlesstherearecircumstanceswhereseparate resolutions are necessar.

See Exhibits G, H, andI or sample resolutions.

Confdentialit o Records

Local oicials who are allowed access to conidential records should note that the use o such inormation is limited

to the governmental purposes set orth in the resolution and is not subject to release in public meetings or other

such orums. Conidential records ma not be shared with other local oicials who have not been authorized b

resolution.


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MARCH 201126

SalES anD uSE tax REGiStRation anD allocation

inFoRMation

As discussed in the previous section, an local jurisdiction desiring to receive conidential registration or allocation

inormation rom us must adopt a resolution according to section 7056 o the Revenue and Taxation Code. Cur

rentl, we provide registration and allocation inormation to cities, counties, and special tax districts upon request.

The registration inormation or special tax districts is related to taxpaers who are registered within the jurisdic tion that is coterminous with the district, that is, a countwide district would receive registration data or taxpaers

registered in that count, and a citwide district would receive inormation or taxpaers registered within the cit

limits. This data is available in two ormats, paper and CDROM. There is no charge or this service.

Registration

A StartUp Decklists all active businesses (including sublocations and recent closeouts) in the jurisdiction. Deliv

er is in two to three weeks rom the date the request is received. StartUp Decks are available at no charge to the

requesting jurisdiction once per 12month period. For inormation regarding ees or additional StartUp Decks,

please contact the Local Revenue Allocation Unit.

Monthly updates consist o the registration changes or a jurisdiction processed during the preceding month. Eachjurisdiction is expected to maintain its own registration database to monitor its local tax allocation. Deliver begins

the month ater the request is received. Redevelopment project (InLieu) permits are included in the appropriate

cits monthl updates and are listed separatel at the end o the ile b redevelopment project area code. Monthl

updates are not available or special tax districts.

Allocation

Allocation History, which lists local tax revenue distributions b month, is available or a maximum o 36 months.

Deliver is tpicall two to our weeks ater a request is received.

Monthly Allocation consists o local tax distributions b jurisdiction during each month. Deliver tpicall begins

our to six weeks ater a request is received. Table 5 describes, b medium, the tpes o inormation available to local

jurisdictions.

How to Order

Registration and Allocation Media can be ordered b completing the Registration/Allocation Media Requestorm,

Exhibit F, and returning it to our Local Revenue Allocation Unit. In order to receive allocation or registration media,

the local jurisdiction must have a resolution on ile with us authorizing an oicial, emploee, or other designated

person to examine the appropriate sales or transactions and use tax records.

Exhibits JP ma be helpul in interpreting the inormation ound on registration and allocation media.


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MARCH 2011|


Table 6

Allocation and Registration Information Currently Available in Media Format

CD-ROM Specifications

1. Recording Mode MS/DOS Format

2. Capacit 640 MB

3. Internal Label None

4. External Label Date created, jurisdiction number and name, indicator o registration and/or

allocation iles, allocation period

5. Record Size/Laout

RegistrationDataAllocationData

____

380 Characters

175 Characters

6. File Name Preix o 1 to 8 characters, a period, and the extension TXT.

7. Data Format ASCII text ile (ASCII character codes 32126) with no ield delimiters or ield

separators. Each line ends with a carriage return and line eed. All decimal

points are explicit. Numeric ields are zeroilled. Alpha numeric ields are

spaceilled.


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MARCH 201128

boE oFFicES aDMiniStERinG local taxES

Allocation Group

The Allocation Group reviews and processes local tax recommendations made b ield audit sta. This ma include

reallocation o local taxes between jurisdictions within the time permitted b the statute o limitations. In addition,

the Allocation Group is responsible or processing petitions rom local jurisdictions or their representatives regard

ing questionable or disputed local tax allocations.

Our Allocation Group ma be contacted b writing:


Audit Determination and Reund Section (Allocation Group)


PO Box 942879


The ma also be contacted b phone at 9163223372 or b ax at 9164452249, or b email at [email protected].


The Local Revenue Allocation Unit (LRAU) is responsible or the initial allocation and distribution o all local taxes

reported on sales and use tax returns, audit indings, and accounts receivable. This includes the distribution o

transactions and use (district) taxes. Questions regarding monthl advances, quarterl cleanup paments, local tax

laws and regulations, and media requests (among others) ma be directed to this unit. The LRAU ma be contacted

b writing:




PO Box 942879


The ma also be contacted b phone at 9163243000, b ax at 9163243001, or b email at [email protected].
mailto:adrs%40boe.ca.gov?subject=mailto:ewgroup%40boe.ca.gov?subject=mailto:ewgroup%40boe.ca.gov?subject=mailto:adrs%40boe.ca.gov?subject=


34/83

MARCH 2011|


SubMittinG PEtitionS FoR REallocation oR REDiStRibution/

DatE oF KnowlEDGE

The Board adopted Regulation 1807, Petitions for Reallocation of Local Tax, in 2002 and Regulation 1828, Petitions for

Distribution or Redistribution of Transactions and Use Tax, in 2004, both o which were amended in 2008. These regu

lations set orth the procedures or submitting, receiving, and processing reallocation and redistributions rom local

jurisdictions and districts, known collectivel as petitioners. Most o the procedures adopted b Regulation 1807now appl to Regulation 1828 with one noted dierence.

A district tax petition or distribution or redistribution must contain the deliver location. I district use tax is

involved, the claim must also contain evidence that the retailer is engaged in business in the district.

The procedures are summarized below. For more inormation, please see Regulations 1807 and 1828.

Petitions should be submitted in wri

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