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The May edition of the Economic Perspective, produced by BOE research staff, summarizes that, “Internet sales are highly concentrated in large sellers. These online sales and their associated use tax payments vary greatly according to household income group.”
Use tax is the equivalent of sales tax and applies to purchases from retailers who are not required to report and pay sales or use tax in California.
Out-of-state Internet sellers (or other out-of-state retailers) that do not have any physical presence in California are not required to collect California tax.
Therefore, individuals or businesses that purchase items from out-of-state retailers that do not collect California tax are required to pay the use tax directly to the state.
“This report documents the growth and diversity of online retailing, as well as the low rate of tax compliance in this area,” said Board Member Yee. “It further illustrates the state’s need for additional tools to collect use tax from online retailers on the same terms as local, 'brick and mortar' outlets."
The BOE report released points to many factors related to Internet sales:
The top 10 ecommerce firms of the top 500 largest retail websites, ranked by annual sales, account for 48 percent of all ecommerce sales made.
Sales made by ecommerce retailers average about $660 per U.S. household with an Internet connection.
The average sale is $210 per transaction.
Households with incomes between $60,000 and $100,000 account for about one third of all Top 500 ecommerce retailers’ sales.
Households with greater than $100,000 incomes account for 27 percent of purchases.
Low income households spend proportionately similar percentages of their incomes online as middle and upper middle class households (about 1.5 percent).
The highest income group spends proportionately much less of their income online (0.6 percent).
Taxpayers are paying an average of about 1.4 percent of the total use tax liabilities they owe.
High income taxpayers paid an average of four percent of their liabilities.
Compliance is less than one percent of liabilities for all household income groups other than the highest earning group
BOE’s most recent estimate is that about $1.1 billion in use tax due goes uncollected each year.
The Economic Perspective newsletter is a quarterly publication produced by the BOE that looks at economic factors of interest or that influence California economic activity.
Yee was elected to her post in November 2006. Her district includes many of California's coastal counties, from Del Norte to Santa Barbara, and includes the entire San Francisco Bay Area.
The five-member California State Board of Equalization (BOE) is a publicly elected tax board.
The BOE collects more than $48 billion annually in taxes and fees supporting state and local government services.
It hears business tax appeals, acts as the appellate body for franchise and personal income tax appeals, and serves a significant role in the assessment and administration of property taxes.
For more information on other taxes and fees in California, visit www.taxes.ca.gov.
For the May 2011 Economic Perspective visit www.boe.ca.gov/news/2011/pub329.pdf.
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Total revenues for the month were $397.6 million above (4.0 percent) estimates found in the Governor’s proposed 2011-12 state budget.
“While April’s revenues were nominally higher than estimates, they did not provide much breathing room in the budget debate,” said Controller John Chiang. “We are a long way from closing the books for this fiscal year. June is still a very important month for revenues, and in that month our outlook could improve or deteriorate significantly.”
Sales taxes were over projections by $45.2 million (5.0 percent) in April, and personal income taxes were up $272.7 million (4.0 percent). Corporate taxes were down $48.2 million (-3.1 percent).
Year-to-date tax revenues are approximately $2.5 billion ahead of projections. But from a cash perspective, receipts are actually up $1.3 billion.
The difference comes from the aborted sale and lease-back of State properties which Gov. Jerry Brown canceled this spring. That arrangement was originally projected to generate $1.2 billion in March 2011.
The state faced a $17.8 billion cash deficit on April 30. That deficit was covered by $7.8 billion of internal borrowing – short term loans from special funds – and $10 billion of external borrowing.
April 2011’s financial statement and the summary analysis can found on the Controller’s Web site at www.sco.ca.gov.
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The tasting center opening festivities will be held from noon to 4 p.m. and are open to the public.
Like the handcrafted wines that reflect the diverse micro climates and soil types from within the winery's sustainably-farmed estate vineyards, the long anticipated tasting center pays homage to the California mission-style in its use of reclaimed materials from the early 20th century.
The ranch in the High Valley Appellation was one of the first homesteads in Lake County and the construction of and attention to detail in our new facility reflects the authenticity of that time.
Award-winning architect Ron Firestone and landscape designer Dennis Turner have designed the extensive facilities and grounds.
The cabinetry and woodwork for the tasting center was milled from the winery's own walnut orchard and handcrafted by master carpenter Albert Edijou.
The winery's current vintages are a collaboration between winemaker Kevin Robinson and consulting winemaker David Ramey.
The $10 fee for the May 28 event includes a commemorative glass, hors d’oeuvres and wine tasting.
One hundred percent of the proceeds from ticket sales will be donated to Safe House of Lake County.
Brassfield Estates Winery is located at 10915 High Valley Road, Clearlake Oaks.
Call 707-998-1895 or visit www.brassfieldestate.com.
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Landis+Gyr has determined the error affects fewer than 1,600 of the two million meters it supplied to PG&E.
The utility will replace the meters at no cost to customers and issue full refunds to customers who received inaccurate bills.
The average refund will be about $40 per customer. PG&E will also issue a $25 credit for customer inconvenience and offer a free in-home energy audit to affected customers.
“We take this issue very seriously and will do the right thing for our customers. We are committed to accurate metering and billing and will contact our affected customers immediately and issue full refunds," said Greg Kiraly, vice president, SmartMeter operations. “We encourage any customers with questions to call our SmartMeter help line at 1-866-743-0263.”
Landis+Gyr meters with the defect occasionally run fast when experiencing a narrow band of high temperatures, resulting in a miscalculation of energy bills.
The problem, which affects less than 0.08 percent of the SmartMeters supplied to PG&E by Landis+Gyr, was discovered by PG&E's quality assurance program and the advanced diagnostics available through the SmartMeter technology. If any additional meters malfunction, the diagnostic signals will flag the meters for immediate replacement.
“We are confident that we have identified the small population of meters with this defect based on the diagnostic flags and extensive additional testing in our labs and in the field,” said Jerry Figurilli, chief operating officer for Landis + Gyr North America.
PG&E will share the technical analysis of the meter issue with the California Public Utilities Commission (CPUC) for its review, and with the American National Standards Institute (ANSI), which approves the relevant testing standards for the metering industry.
PG&E is installing SmartMeters throughout its service area in keeping with California's statewide policy to provide customers with more affordable, reliable and environmentally sustainable energy services.
The company said independent tests have shown SmartMeters remain the most accurate and reliable tools for measuring customer energy use, although one of the major concerns raised about the devices by consumers has been the issue of inaccurate billings.