Form Boe-400-Dp - Application For Use Tax Direct Payment Permit Page 2
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2BOE-400-DP (BACK) REV. 2 (8-05)
USE TAX DIRECT PAYMENT PERMIT
(General Information and Filing Instructions)
Revenue and Taxation Code section 7051.3 authorizes the State Board of Equalization to issue a Use Tax Direct Payment Permit to
qualified applicants. This permit allows purchasers and lessees of tangible personal property (other than lessees of motor vehicles the
lease of which is subject to the terms of section 7205.1 of the Sales and Use Tax Law) to self-assess and pay use taxes directly to the
Board instead of to the vendor or lessor from whom the property is purchased or leased.
Permit holders will be provided with a Use Tax Direct Payment Exemption Certificate which they can issue to retailers and lessors when
they purchase tangible personal property subject to use tax or make qualified leases of tangible personal property. Vendors who timely
take the certificate in good faith from a permit holder are relieved of the duty to collect use taxes on the sales for which the certificate
was issued. Permit holders who acquire property under a certificate must self-assess and report the use taxes directly to the Board on
their tax returns, and allocate the local taxes to the county, city, city and county, or redevelopment agency in which the property is first
used. Permit holders who fail to properly pay any use taxes that are due on property for which a certificate was given are subject to
interest and penalties assessments in addition to their tax liability.
To qualify for a Use Tax Direct Payment Permit, an applicant must meet the following conditions:
(1) The applicant must agree to self-assess and pay directly to the Board any use tax which is due on property for which a use tax
direct payment exemption certificate was given; and
(2) The applicant must certify to the Board either of the following:
(A) The applicant has purchased or leased for its own use tangible personal property subject to use tax which cost five hundred
thousand dollars ($500,000) or more in the aggregate, during the calendar year immediately preceding the application for the permit; or
(B) The applicant is a county, city, city and county, or redevelopment agency.
Persons wishing to obtain a use tax direct payment permit must be pre-qualified and either hold a California seller’s permit or a
consumer use tax account.
Persons other than governmental entities who currently hold either a California seller’s permit or a consumer use tax account must
complete the application for a Use Tax Direct Payment Permit, sign the certification statement attesting that they qualify for a permit
under conditions of Part (2)(A) above, and submit a “Statement of Cash Flows” or other comparable financial statements
acceptable to the board for the calendar year immediately preceding the date of application which discloses total purchases
of property and equipment for own use and a separate statement under company letterhead certifying that five hundred
thousand dollars ($500,000) or more of such purchases were subject to use tax.
Persons other than governmental entities who are not required to hold a seller’s permit and who do not currently hold a consumer use
tax account must obtain a consumer use tax account and then complete the application for a Use Tax Direct Payment Permit, sign the
certification statement attesting that they qualify for a permit under the conditions of Part (2)(A) above and submit a “Statement of
Cash Flows” or other comparable financial statements acceptable to the board for the calendar year immediately preceding
the date of application which discloses total purchases of property and equipment for own use and a separate statement
under company letterhead certifying that five hundred thousand dollars ($500,000) or more of such purchases were subject to
use tax.
Governmental entities who currently hold either a California seller’s permit or a consumer use tax account must complete the application
for a Use Tax Direct Payment Permit, sign the certification statement attesting that they qualify for a permit under the conditions of Part
(2)(B) above, and submit an additional statement to that effect under official letterhead and signed by an authorized governmental
representative.
Governmental entities who do not hold a California seller’s permit or a consumer use tax account must obtain a consumer use tax
account and then complete the application for a Use Tax Direct Payment Permit, sign the certification statement attesting that they
qualify for a permit under the conditions of Part (2)(B) above, and submit an additional statement to that effect under official letterhead
and signed by an authorized governmental representative.
The completed Application for Use Tax Direct Payment Permit, certification statement, and qualifying documentation should be returned
to the address shown below. Upon determination that the applicant qualifies, a Use Tax Direct Payment Permit and a Use Tax Direct
Payment Exemption Certificate will be mailed to the applicant.
If you would like additional information regarding the Use Tax Direct Payment Permit or need assistance in completing this application,
you can call 916-445-5167, or write to the Board of Equalization, Compliance Policy Unit, P.O. Box 942879, Sacramento, CA
94279-0040.
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