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Uncollected Taxes

November 03, 1985

The underground economy ----business activities not paying taxes----is now the subject of great governmental concern. Robert Martin's letter (Oct. 10) points to a major area of uncollected taxes.

Taxable sales not reported by business owners, or receipts from taxable sales intercepted by retailers' employees, may be the biggest single revenue loss to the State of California. from information received from the Board of Equalization staff, I estimate that between 1% and 3% of annual taxable sales are not reported. That means, in 1984, approximately $4 billion in such sales were unreported, resulting in a $250-million sales tax revenue loss.

This money generally becomes unreported income for state and federal income tax purposes as well--a double loss to governmental revenue!

Richard Nevins

Member, State Board of Equalization Arcadia

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