Beginning January 1, 2013, purchases of lumber products and engineered wood products for use in California are subject to a one percent (1%) assessment based on the selling price of the products. This publication provides information to retailers in applying the assessment to your sales of specific materials, how to properly charge your customer and how to report and pay the Board of Equalization (BOE). This publication also provides information on how to report and pay using eRegistration (eReg) on purchases of these materials from out of state.

Retailers of lumber products and engineered wood products are required to:

• Collect the 1% assessment on sales of lumber products and engineered wood products to California consumers.
• State the amount of the 1% assessment as a separate item on your sales receipt. The separately stated amount is not subject to sales or use tax. The assessment may be designated on the sales receipt as “lumber products assessment,” “LPA,” “lumber assessment,” “lumber fee,” or “lumber.”
• File electronically and pay the assessment to the BOE on your sales and use tax return.

Reporting and paying the assessment

Retailers of lumber products and engineered wood products are required by law to electronically report and pay the assessment to the BOE. The BOE automatically updates the electronic filing status of retailers that we are able to identify as selling lumber products and engineered wood products to include an assessment schedule as part of your sales and use tax return.

If you are a retailer of lumber products and engineered wood products and your account has not been updated to include the assessment schedule with your sales and use tax return, please call our Taxpayer Information Section at 1-800-400-7115.

If your eFile account was updated to include the assessment schedule and you are not a retailer of lumber products and engineered wood products, please contact our Taxpayer Information Section at 1-800-400-7115.

If you are one of the 2 percent of retailers that do not currently efile, our eFile program provides you with a more convenient method of filing your tax return. Please click the eServices link on our home page for more information on efiling.

Sales not subject to the assessment

In general, the assessment is not due on the following sales:

• Sales for resale. In a sale for resale, the purchaser is not regarded as purchasing the lumber product or engineered wood product for their own use in this state.
• Sales in interstate commerce. Sales made by a retailer in California but shipped directly to customers outside of California.
• Sales to the U.S. government.
• Sales involving Native American Indians follow the same rules as the sales and use tax law. Please see Regulation 1616, Federal Areas, and publication 146, Sales to American Indians and Sales in Indian Country.

Reimbursement for startup costs

If you were in business selling lumber products and engineered wood products prior to January 1, 2013, you may offset your reported assessment amounts for certain costs incurred to begin collecting the assessment. You may retain $250 per business location as reimbursement for one-time startup costs associated with the collection of the assessment. Please see Regulation 2000, Retailer Reimbursement Retention, for guidance on the reimbursable costs.

Note: This publication summarizes the law and applicable regulations in effect when the publication was written, as noted above. However, changes in the law or in regulations may have occurred since that time. If there is a conflict between the text in this publication and the law, decisions will be based on the law and not on this publication.

The Board of Forestry and Fire Protection (BOF) is responsible for determining the products that are subject to the lumber products assessment. See the Board of Forestry, Emergency Regulation to Implement Lumber Products Assessment. The BOF is required to annually update their regulation.

In general, lumber products and engineered wood products subject to the assessment are building products usually used in construction in which wood is at least 10% of total content. For example, all dimensions and grades of lumber, roofing, (shakes and wooden shingles), siding, lath, plywood, particle board, fiberboard, oriented strand board, I-joists, laminated veneer lumber, veneer-based sheeting material, and inorganic-bonded and wood thermoplastic composites, including plastic lumber and decking.

Based on guidance provided by the BOF the lumber products assessment does not apply to products where labor has added ‘significant value’ to them, such as:

• furniture,
• doors,
• windows,
• decorative products such as wainscoting, paneling, molding or baseboards that have added profiling, patterns, chamfering or other craftsmanship.

However, the addition of any value to a lumber product does not automatically result in a product not subject to the assessment. Many lumber products undergo additional processing before being used, but are still subject to the assessment; for example, lumber that is graded and planed. In addition, engineered wood products, which are subject to the assessment, have been, by definition, processed or manufactured from raw materials. Thus, it is important to consult the BOF’s Emergency Regulations when trying to determine if a product is subject to the Lumber Products Assessment.

Assessment Table
Subject to Assessment	Not Subject to Assessment
Solid Wood Products
Cross-laminated timbers Decking Fencing (poles, solid board) Lath Lumber Poles Railings Roofing (shakes and wooden shingles) Siding (beveled shingles, board and batten, log, tongue and grove, treated wood) Structural panels Sub-flooring Engineered Wood Products Edge-glued material Fiberboard Flakeboard Glue-laminated timber Hardboard I-joists Laminated beams Laminated strand lumber Laminated veneer lumber Oriented strand board Oriented strand lumber Parallel strand lumber Particleboard Plywood Veneer-based sheeting material Waferboard Inorganic-bonded and wood thermoplastic composites Cement-bonded composite materials Ceramic-bonded composite materials Gypsum-bonded composite materials (fiber reinforced gypsum) Wood thermoplastic composite materials including plastic lumber and decking	Bark or cork products Blinds Brooms Cabinets Carvings and craft products Cooperage and treatment materials (including staves, storage vessels, and oak chips for wine, beer or sprits) Doors Firewood Frames Furniture Indoor finished flooring products such as hardwood (solid or engineered) Kitchenware Ladders Laminate flooring Lattice Millwork (window casings, baseboards) Molding Musical instruments Paneling Paper products Pre-constructed fencing sections Pre-constructed railing sections Pre-fabricated housing Shutters Signs Sporting goods and equipment Stakes Tools, tool handles Trusses Wainscoting Windows

The Board of Forestry and Fire Protection (BOF) is required to annually update the regulations pertaining to lumber products and engineered wood products, to identify the types of products subject to the assessment. For more information about products subject to the assessment, visit the BOF website at http://bof.fire.ca.gov.

Consumers and Construction Contractors

Consumers

If you purchase lumber products and engineered wood products for use in California and do not pay the 1% assessment to a California retailer or you purchase these products from outside of California for use in this state, you are required to report and pay the assessment directly to the BOE.

Construction contractors

Construction contractors who purchase lumber products and engineered wood products that will be consumed in the performance of a construction contract in California must pay the assessment either to the retailer upon purchase or directly to the BOE.

When you purchase lumber products and engineered wood products for resale, you are responsible for collecting the assessment at the time of sale and reporting and paying the amounts due to the BOE.

If you purchase lumber and engineered wood products to produce items to sell at retail (for example, lumber products to make prefabricated cabinets), you may purchase the products for resale and their purchase is not subject to the assessment.

In addition, the subsequent sale of products that you have manufactured, assembled, processed or produced from the lumber products and engineered wood products is not subject to the assessment (see Definitions and Assessment Table, for products not subject to the assessment).

How a consumer can pay the 1% assessment to the BOE

If you are a consumer of lumber products and engineered wood products and do not currently hold a seller’s permit, you may register with the BOE to report and pay the 1% assessment online using eRegistration (eReg). eReg is also available in our field offices. Please contact our Taxpayer Information Section for assistance at 1-800-400-7115.

For additional information about construction contractors, see publication 9, Construction and Building Contractors.

For additional information, go online at www.boe.ca.gov to view our frequently asked questions (FAQ’s) regarding the lumber products and engineered wood products assessment. Or if you have questions regarding the assessment, please call 1-800-400-7115 (TTY:711), Monday through Friday 8:00 a.m. to 5:00 p.m. (Pacific time), excluding state holidays, to speak to a customer service representative.

Regulations
California Code of Regulations, Title 14

1667.1 Authority

1667.2 Timber Regulation and Forest Restoration Fund

1667.3 Definitions

1667.4 Assessed Lumber Products

1667.5 Requests for Review

1667.6 Annual Update of Regulation

California Code of Regulations, Title 18

2000 Retailer Reimbursement Retention

Sales and Use Tax Regulation

1616 Federal Areas

Publications

9 Construction and Building Contractors

146 Sales to American Indians and Sales in Indian Country

159 eFile Guide