Orange County Register

State inspectors are targeting nine more ZIP codes in five cities in search of businesses that are not paying sales tax to the state.

The visits are part of the State Board of Equalization’s three-year plan to maximize tax collections at a time that the state budget running a $42 billion deficit.

The inspectors are going door-to-door in retail areas 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 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 board is notifying 7,400 businesses in Long Beach, Palm Springs/Riverside, Richmond, San Jose and Sacramento.

The targeted ZIP codes in this round of visits are:

• Long Beach, 90803, 90813 and 90814
• Palm Springs/Riverside, 92262
• Richmond, 94803 and 94804
• San Jose, 95113 and 95116
• Sacramento, 95814

Inspectors have already targeted parts of Santa Ana and Costa Mesa. Since the program started in September, inspectors have visited 30 ZIP codes statewide.

The state estimates that $2 billion in sales and use taxes are owed but not collected. The agency expects this enforcement program to collect $61 million the first year and $81 million when it’s in full force.
Based on a pilot program, the board 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.

Other business stories…

• Sales tax enforcement targets O.C. cities
• Two more cities targeted by state sales tax hunters
• Two from O.C. owe $1.36 million in sales taxes
  

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