This morning I helped a CPA tell his clients about the State of California’s effort to collect use tax payments. The concept is straight-forward, but the language used by the government is either straight out of Marketing 101 or George Orwell’s 1984.

Here’s the problem for cash-strapped California. When you buy goods “tax free” from out-of-state stores like the Internet’s Amazon.com, you are required to pay the sales tax (called a “use tax”) to California. The State thinks that most people and companies ignore this rule and fail to pay what they should.

According to legislation effective 2010, businesses are supposed to file a report annually online declaring what they owe and pay it.  Individuals are supposed to declare and pay their use tax amount when they file their state income tax form.

Since the state is desperate for money, the Franchise Tax Board is sounding pretty shrill over the filing requirements.  All of this is understandable and meets my expectation of what government are supposed to do.

But , two parts of the program twist the English language too much:

  • The state requires businesses that gross over $100,000 annually to file a report online unless they already have a sale tax certificate.  The business who the state is now forcing to file extra reports are called by the state, “Qualified Purchasers”.Really?  “Qualified Purchaser” means I have to file more tax forms?

    How do I get disqualified?

  • The legislation that established this extra reporting burden on small/medium-size  businesses was called, wait for it…, “The Internet Tax Freedom Act”.(See the letter to tax professionals from the state.)

If words are to have meaning, the legislator and the Franchise Tax Board need to be sent back to remedial summer school.  Oops!  I forgot.  There’s no money anymore to teach language skills.