This month, more than 90 thousand taxpayers will be notified they will no longer be receiving paper returns from BOE, but rather be expected to file online. This first group of existing taxpayers transitioning to e-filing includes single location quarterly prepayment accounts that are comprised of medium- to large-size businesses that file and make prepayments 12 times a year. These taxpayers will be expected to e-file rather than use a paper return with the reporting of third quarter 2008 returns, due October 31.
In addition to existing accounts, beginning July 1 all new businesses that apply for a seller's permit will be set up for e-filing. There are an estimated 165,000 new seller's permits issued each year.
The BOE-file program offers taxpayers a fast and convenient method of reporting, enhances the ease of filing, improves government efficiencies in tax administration and helps the environment by using less paper. The BOE currently prints, mails and processes over 3.5 million sales and use tax returns annually. The taxpayers transitioning to e-filing in this phase account for approximately 1.4 million of these returns. The BOE estimates savings of up to $1.8 million in 2008-2009 with a participation rate of 25 percent to 50 percent of those eligible for e-filing.
Over the next two years, the majority of existing sales and use tax accounts will be transitioned from paper to e-filing, phased in based on account type and reporting basis. All businesses will receive BOE-file notices in their next quarterly tax returns, expected around July 1, 2008. Taxpayers may request a one-year exemption from online filing.
The BOE offers a free option, BOE-file. In addition, taxpayers may also choose from two fee-based electronic service providers. Accountants, bookkeepers and other third-party return preparers can e-file on behalf of the taxpayer as well.
BOE-file has options to make payments via credit card or by check for all taxes and fees it collects. Taxpayers may use Discover, MasterCard, American Express and Visa. A convenience fee is charged and retained by the credit card processor. Besides sales tax, the BOE also administers levies on alcohol, fuel, tobacco, tires, lumber and a number of other environmental fees. For motor vehicle fuel taxes, the International Fuel Taxes Agreement program and the Underground Storage Tank Maintenance Fee programs administered by BOE, visit the BOE web site at www.boe.ca.gov and click on the E-services icon.
The BOE launched its first free e-file system in 2005. More than 830,000 businesses are currently eligible to use BOE-file. There are currently 879,000 active sales and use tax accounts registered with the BOE.
