California Use Tax Registration for Businesses

California businesses may be required to file a use tax return every year even if they don't owe tax.  The purpose is to pay use tax  (ie, "sales" tax) on products purchased and used in the business if tax wasn't paid at the time of purchase...e.g., products purchase by catalog or online with no sales tax charged.    

Under R&TC §6225,  any business with gross receipts of $100,000 or more must file a use tax return every year.   There's an exception if the business is  already registered with the Board of Equalization to pay sales and use tax,   for example,  retailers who already file a sales tax return for products they sell.  

Here's an example:  You are a self employed real estate agent and report your income income and expenses on Schedule C.  Your income is $105,000 and your expenses are $20,000.  You have to file a use tax return as your gross business income is over $100,000.  

There are a couple if quirks to be aware of:

1. For purposes of the $100,000. all businesses you own have to be aggregated including rental property.  Example:  Your gross income from your consulting practice is $85,000 and your rental duplex grosses $20,000.  You have to file as the total is $105,000 (ie over the $100k threshold).  All businesses and rentals with the same ownership have to be aggreagated.

2. If you ever meet the $100,000 threshold, you have to keep filing.  Example:  You met the $100,000 requirement in 2009 but not in 2010, you still have to file for 2010 and all future years so long as you have the business.

You first have to register by filing Form BOE-404-A.  This can't be done online.  You have to mail the form  in.

Here's a copy:

Then BOE will mail you log in information to file online at 
eFile Sales & Use Tax – Board of Equalization

Additional information is contained in the link below.