Please review your purchases for possible unpaid use tax
Dear Taxpayer:
According to our records, you have recently reported use tax on your Combined Excise Tax
Retums. Because construction businesses typically owe use tax, we are asking you to review the
purchases you have made since January 1, 2000, for possible unpaid tax. Use tax is only due when
sales tax has not been paid.What To Look For
Look for major purchases on which you may owe use tax, such as:
4 materials, hired contractors, and labor 4 tools and equipment
purchased for speculative building
4 rental equipment with or without operator 4 offîce furniture, equipment, and supplies
Speculative builders:
• are builders who make improvements on land they own.
• owe sales or use tax on all building materials, all charges from other contractors, and all items
consumed in speculative building projects.
Custom builders:
• are builders who make improvements on land owned by another.
• do not owe sales or use tax on materials incorporated into custom construction projects.
• owe sales or use tax on all items consumed (tools, equipment, supplies, etc.).
If You Owe and Do Not Pay
We will assess:
• interest.
4 a 5% billing penalty on any unpaid back taxes.
Additional penalties are:
• a late filing penalty ranging from 5% to 25%.
4 10% for negligence and failing to comply with written instructions.
• 50% for tax evasion.
If You Owe Additional Use Tax
Report the total cost of purchases described above on the following lines of your next Combined
Excise Tax Retum:
• Use tax line (line 17)
• Local use tax line (line 23)
• Region Transit Authority (RTA) line, if you are located within the RTA district (line 26).