State inspectors starting this week will target retailers in Santa Ana and other key areas in a statewide search for businesses that are not paying sales tax to the state.
It’s the first step in a three-year plan to maximize tax collections at a time that the state budget is $15.2 billion in the red.
Starting this month, specialists with the California Board of Equalization will go door-to-door in retail areas of Santa Ana ZIP codes 92701 and 92705 asking to see the appropriate permits or licenses that allow for collection of sales and use tax as well as other taxes and fees, the agency announced.
The penalty for selling without a license can be $1,000 fine and six months in jail, plus paying all back taxes and facing regular audits in the future, which can be costly and time-consuming.
The other targeted ZIP codes in this initial rollout are:
- Perris, 92570
- Lake Elsinore, 92530
- Torrance, 90505 and 90504
- Emeryville, 94608
- San Jose, 95110 and 95111
- Sacramento, 95826
- Van Nuys, 91406
Because of experience in a recent two-year pilot program in Norwalk and San Francisco, the agency estimates that more than 3% of California businesses — more than 33,000 — do not have required seller permits and aren’t collecting sales and use tax.
A sellers permit allows a business to buy products without paying sales tax. When the business sells those products it collects sales tax from the buyer and passes it on to the state.
In the pilot program, the first visit to a retailer resulted in the owner buying a sellers permit 20% of the time. A second visit increased compliance to 45%.
The state estimates this enforcement program will collect $61 million the first year and $81 million when it’s in full force. The agency estimates that it’s failing to collect some $2 billion in sales and use taxes that are owed.
The Board of Equalization collects more than $53 billion in taxes and fees annually, of which sales tax is the largest.
In most of Orange County, the sales tax is 7.75% — its 8.25% in Laguna Beach — and it’s as high as 8.5% in San Francisco. The governor has proposed increasing the sales tax a penny to help deal with the deficit.
The Board of Equalization has divided the state into seven parts with three-member teams visiting every storefront and other known business locations. The teams will check service businesses known to sell taxable retail items.
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“In most of Orange County the sales tax is 7.75% — its 8.25% in Laguna Beach — and as high as 8.5% in San Francisco.”
Can you spot the Democratic trend?
NO NEW TAXES!!
They need to target Little Saigon. They could pay off the national debt with the businesses they catch cheating there!
In 2005 Laguna Beach increased the sales tax to rebuild a landside area. The voteers voted for the increase.
“Laguna voters later approved a local sales-tax hike to help pay for hillside repairs, but it could be many months before residents are able to rebuild”
How much is the state in the hole? $15 billion? That seems like the number we keep hearing from the Governor. If someone see’s Arnold, please ask him how much the state is spending each year on illegal immigrants. If I am not mistaken, that number was somewhere in the ballpark of $15 billion as well. Seems like a no-brainer to me. Get rid of the illegals, get your $15 billion dollar defecit under control without sticking it to the taxpayers with another tax hike!
I turned in some unscrupulous people to the Board of Equalization, and because their sales were less than $100,000 and the sales tax was so insignificant, the staff member at BOE declined to take a repoty!
Knowing this, I can state with authority that most businesses in Santa Ana will be safe from compliance.
Hey, I was trying to write that the BOE staff member declined to take a REPORT!
they are targeting santa ana and inland empire. guess why. illegal mexicans. they surelove to take but when it comes to paying taxes they would rather send their moneyback to pathetic mexico. you morons have turned california into an illegal mexican welfare project. see someday when further generations wake up this mexican problem will be neutralized at the border.
To answer Duh, there are approximately 1 million children of illegal aliens of K-12 age living in California according to Hew Hispanic Cnter report of 2006. If you take the 2008 $65 billion K-12 education budget for the 6.3 million students in K-12 public schools in California you arrive at a cost of around 10 billion dollars annually to educate the children of illegal aliens. Toss in another billion dollars anually for the free breakfast and lunch 95% of them receive and you arrive at 11 billion dollars annual cost to provide education to children of illegal aliens.
I thought Ahnold wasn’t going to raise taxes? Cali-Mexico is turning into a third world country. I’m all for legal immigration, immigrants assimulating to American society, learning English, paying taxes, etc. What I am against is the all-out assault the Mexican Government has taken against the U.S. by encouraging illegal immigration. If you stop the benefits, seriously go after employers that hire illegals, start deporting illegals, and enforce border security, then this problem will be solved. Until then, it will stay the same. Vote these clowns out of political office that are Pro Illegal Immigration.
The power to tax is the power to destroy.
I agree with JOEMUSTGO. LOL
Also agree with ANGLER.
I’m against raising taxes as well, but seriously, what else is he supposed to do? He can’t pull a few billion dollars out of his ass. He’s picking up the pieces from someone else’s cluster.. Would your rather pay a little more on sales tax than be laid off? He can’t take any more money from Cities, Teachers, etc for budget cuts. He’s already cut them off enough. Cities are scrambling for ideas on how to save money and who to lay off. Teacher’s as it is pay for supplies out of their own pocket and are underpaid.
Suck it up and pay a little more in sales tax! If you don’t, it will affect public safety (your safety) as well as the education of your children. And that’s just two occupations!
As tax jurisdictions encounter shortfalls, you’ll see more aggressive compliance and collection… everywhere…