California tax collectors to visit small businesses

Next week, the first of 8,000 small retailers and other businesses targeted can expect state workers to come calling as part of a new program by California tax collectors to catch scofflaws.

The investigators from the state Board of Equalization will be checking for seller's permits, business licenses and evidence that the businesses are collecting and paying enough sales tax and the often-overlooked use tax.

The campaign is the start of a three-year program that state officials say will eventually reel in $223 million in previously uncollected taxes.

"There is a $2-billion difference between taxes owed and taxes paid," said Randie Henry, deputy director for the agency's sales and use tax department.

"This effort will help us to address that gap by making the landscape fair for those businesses that do comply with the law and are registered and appropriately pay their taxes," she said.

Based on the results of a pilot program, Henry expects that 3% of the businesses inspected won't have their required seller's permits, which are supposed to be posted in a public spot, and won't have paid required taxes.

The initial targeted ZIP Codes in Southern California are: Perris, 92570; Santa Ana, 92701; Torrance, 90505; and Van Nuys, 91406. Businesses farther north, in parts of Emeryville, Sacramento and San Jose also will receive the 20-minute visits.

The new program to boost compliance is getting off to a slower start than anticipated because of the state budget stalemate. Until money is released to fully fund the effort, the size of the program's seven teams will be limited. Instead of 12 state workers each, eight of whom were to be in the field, there will be smaller teams with about three field workers each, said Erin Little, the department's assistant chief of field services in Southern California.

Follow-up efforts also may take longer until the program is fully staffed, said Anita Gore, spokeswoman for the Sacramento-based board, which collects certain business taxes and fees, as well as property taxes. The board doesn't handle individual or corporate income tax.

They're ready at Second Time Around, a consignment shop that has operated in the Torrance 90505 ZIP Code for 32 years, said owner Susan Carmer. She was puzzled when she received the letter from the board but decided to check to make sure her seller's permit was still in its glass case and that her business license was at hand.