California Tax Return Now Requires More Use Tax Information

AB 1593 (Ch. 17-563) directs the FTB to revise the 2017 personal income tax returns to require that the taxpayer enter a number on the use tax line (line 91). If the taxpayer enters zero on line 91, the taxpayer must check one of two boxes indicating that either the taxpayer owes no use tax, or the taxpayer has remitted his or her use tax obligation for the taxable year directly to the CDTFA.

In other words, if you bought property online or out of state for which you did not pay sales tax, California wants you to remit use tax in lieu of unpaid sales tax. Use tax is basically the same as sales tax but it is paid to California if you bought something out of state.

Have you already paid it to the CDTFA, the sales tax people? I doubt it. If not, we can include it on your tax return, or we can give you a form to fill out yourself, and indicate on your return that you're going to do it. This Form CDTFA-401- E (https://www.cdtfa.ca.gov/formspubs/cdtfa401e.pdf) is 15 pages long and I doubt that anyone would be interested in filing it out on his own. As an alternative, you may use the use tax tables to plug in the number in the income tax return.

In the past, very few noticed Line 91 and skipped right through it. But California now requires an affirmative statement whether no use tax is due or it has already been remitted.

Why am I writing about this? If neither of the boxes is checked, the FTB's e-file system will not accept the return for processing and will provide an error message. So when you see the newly added questions about California use tax in the organizer, it isn’t a pass at nitpicking but an effort to ensure that your California tax return isn’t rejected by the FTB once e-filed.