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State Tax Officials Target Mill Valley Businesses

State Board of Equalization includes businesses in the 94941 zip code for door-to-door inspections.

Mill Valley businesses can expect door-to-door inspections from the California Board of Equalization in the coming weeks as the agency steps up its outreach in 34 zip codes areas, including the 94941. The goal, according to agency officials is to educate retailers and business owners on sales and use tax reporting responsibilities, increase tax compliance and help make the state’s tax system fair and equal for all Californians. 

“The goal of these visits is to reach out to business owners and help them comply with state requirements,” BOE Chairman Jerome Horton said in a statement. “The good news is we find 98 percent of all businesses complying.”

This month, 17,712 letters were sent to retailers and businesses across the state, including those in Mill Valley and part of San Francisco.

Since 2008, the agency outreach and compliance teams have visited more than 311,878 businesses in 461 zip codes statewide to verify that retailers and businesses are registered and to make sure that noncompliant businesses do not have an unfair advantage over registered businesses that are reporting their sales and use taxes and/or fees to BOE.

The teams go door-todoor, checking seller’s permits at stores and other known retail and business locations. They also check that registered retailers, as well as service industry businesses, have appropriate permits and licenses.

Businesses found to be out of compliance are given instructions on how to register with the BOE and given information about other necessary licenses. Agency officials said that BOE has found that about 2 percent of businesses operating in California do so without permits or licenses that allow for collection of sales and use taxes and other taxes and fees.

Noncompliance is a contributor to the more than $2 billion sales and use “tax gap” – the difference between the amount of taxes owed and the amount of paid, Horton said.

Rico June 20, 2012 at 02:37 AM
I would hope that most people or entities that have enough education to start a businesses would know about licenses and taxes, especially in Mill Valley. But I could be wrong. What kind of special license is needed to sell maternity clothes ? Probably just a local business license from the City of Mill Valley based on gross sales, not real technical stuff. Perhaps this investigation paid for by the taxpayers is just another make work project, or maybe they are looking into money laundering. With the rents as high as they are in M.V., many people do wonder how these little boutiques can afford to even pay the high rent.
Beads of Marin June 20, 2012 at 04:47 PM
As a business owner in town, I too received the notice and having heard some horror stories about what happens when the tax board investigates businesses, I called the Board immediately. What is happening is not an investigation or anything of the sort and no one is being targeted. What is happening is a visit/inspection, where businesses will need to show their resale permits and show how they track sales, such as having cash registers that record transactions or other forms of tracking. Business will not be interrupted, the representatives are not allowed to stop any business from being conducted, they may not speak with clients or require employees to provide information or documents or anything of the sort (I was concerned that the inspectors would come when I'm not in the store and my employees would not know what they may or not do). Businesses that are suspected of money laundering require much more than this sort of a visit to be found, so this inspection would not expose most of these businesses, though one never knows. Those of us who conduct businesses with all the necessary documents have nothing to be concerned about, and for those who don't they should step up and pay up the taxes they collect. Sales tax collected does not belong to us business owners, it belongs to the schools, and the roads and the libraries and a whole lot of other services we expect.
Scott June 20, 2012 at 04:52 PM
Seems like they'd need a warrant backed by probable cause that a business is not correctly paying their taxes to require that information. Sure they can ask but I'd think you don't have to answer absent a warrant.
Beads of Marin June 20, 2012 at 04:58 PM
For the tax board, not submitting taxes is enough of a probable cause to investigate, and an audit is does not require probable cause since it can be done randomly just like our personal taxes can be audited randomly. This is not an investigation or an audit into anything of this sort, this visit is to see if a business has the correct documents to operate legally. We are all required by law to post our business license and resale license. According to the Board rep. the visitor will just look to see if these are posted and by what means sales are tracked without inspecting the actual tracking system or sales record. That is an audit which is very different from this. I don't believe they
Beads of Marin June 27, 2012 at 07:29 PM
I just had my visit and it was as simple as could be, and not scary at all. I venture to say that it's because I have all my paperwork properly displayed and an extensive method of tracking wholesale sales and every piece of information requested easily available. If you are "legal," you have nothing to worry about.

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