California Business Owners
 

Have you heard of this 'new tax law'? My boyfriend owns a company here in Arizona and his company was hired by a company in California. He invoiced them yesterday and was told that California now charges a 7% tax on all out of state contractors and businesses. So, his check was short 7%. Alledgedly he can file a California tax return (even though he does not live there) and get it back at the end of the year. This new tax is supposedly because California is bankrupt (according to the CPA of the California company) and is using this money as an interest free loan from all out of state business.

Is this information correct? We talked to our CPA here in AZ and he had no knowledge of it.

Yes, CA can collect a use tax but it should not be your boyfriend who pays it. It is supposed to be paid by the purchaser. http://www.boe.ca.gov/pdf/pub112.pdf

I'd say your BF got taken for 7%.

That is kinda what I was afraid of. It just sounded too odd. :(

I don't know, but I have to pay federal taxes, california taxes AND los angeles city taxes because I do freelance work!!!!

Ugh :Oh crap

But, you live in California, right? He lives in Arizona. So he is basically paying AZ tax and California tax.