Retailers and businesses in eleven California zip code areas can expect to receive letters from the Board of Equalization (BOE) notifying them about vists from the Statewide Compliance and Outreach Program (SCOP). The SCOP was created to make the California tax system fair for all businesses by helping them understand what state tax and fee permits and licenses they need, and how to get them. The in-person visits are also intended to educate retailers and business owners about reporting responsibilities, and will give SCOP the chance to make sure their records are up to date and correct for the businesses they visit.
Since 2008, BOE SCOP teams have visited more than 340,000 businesses in 427 zip codes statewide to make sure that noncompliant businesses do not have an unfair advantage over registered businesses that are reporting their sales and use taxes and/or fees to BOE. Businesses found to be out of compliance are given instructions on how to register with the BOE and information about obtaining necessary licenses or permits. It is estimated that about 2% of California businesses are operating without the appropriate permits and licenses. Noncompliance contributes to the over $2 billion sales and use “tax gap”, which is the difference between the amount of taxes owed and the amount that is actually paid.
So, is your retail business ready for a visit from a SCOP team? Below are some questions to help you prepare for a visit:
- What kind of permit does my business need?
The permits and licenses needed depend on your type of business. Some businesses require only a seller’s permit, while others also need to register for other state tax and fee programs. For a full list of BOE-administered programs and to see what permits or licenses may be required, click here.
- How do I apply for a permit?
If you have a business making sales or leases of tangible personal property in California and don’t have a seller’s permit, you may download form BOE-400 SPA from SCOP’s website. You can also visit or call your local BOE office or arrange to have an application mailed or faxed to you by calling 800-400-7115.
- When will my business be visited by a SCOP team?
If you already have a sellers permit with the BOE, you’ll receive a letter notifying you about your upcoming visit by a SCOP team. If you do not have a permit you may not get a letter, but SCOP works together with local municipalities and other partners to publicize their visits and raise awareness about their plans to visit certain zip codes. If you’ve received a letter, you can expect your visit to begin as early as two weeks from when you get it in the mail. The SCOP specialists generally remain in the area until all business locations within the zip code have been visited.
If you have additional questions about permits and licenses or SCOP team visits, check out http://www.boe.ca.gov/sutax/SCOP_Overview.htm