California Use Tax Reporting Requirement Hits Small Biz

According to
Upward of 180,000 California businesses are being ordered to register with the state's tax collection agency, the Board of Equalization, and to file a new tax return covering just one levy--the state's "use" tax, a sales tax on items purchased from out-of-state retailers--over the Internet, by telephone or by mail order--and then used in-state. The Supreme Court has ruled that only those out-of-state retailers with some physical connection to a state must collect its sales/use tax. If a retailer doesn't collect it, the buyer is supposed to voluntarily fork over the use tax to his own state.