Beginning January 1, 2013, a new law requires a one percent (1%) assessment on purchases of lumber products and engineered wood products for use in California, based on the selling price of the products.
The new law affects retailers of lumber products or engineered wood products and purchasers, including construction contractors, who use these products in California.
The Retailer section provides important information for retailers of lumber products and engineered wood products.
The Construction Contractor section provides important information for construction contractors and other purchasers.
The Product Definition section defines products subject to the lumber products assessment and provides examples. (updated July 1, 2013)
The Resources tab provides links for additional information and references.
We automatically updated the electronic filing status of certain sellers identified as retailers of lumber products or engineered wood products. Accounts updated as retailers of lumber products and engineered wood products will include a lumber products assessment schedule for use when electronically filing their sales and use tax return.
If you do not currently file online and you are a retailer of lumber or engineered wood products, follow the instructions under eServices to begin filing your sales and use tax return online. The law requires electronic filing of the lumber products assessment.
If your electronic sales and use tax return does not include the lumber schedule and you need to report your sales and/or purchases of lumber or engineered wood products, please call our Customer Service Center at 1-800-400-7115 or your local BOE office to update your account to include the lumber schedule.
If you do not sell or purchase lumber products or engineered wood products please call us to have the lumber schedule removed from your electronic sales and use tax return. You may also send an email to SUTD-LAM@boe.ca.gov and provide us your account number and a request to remove the lumber schedule.
Retailers established in business selling lumber products and engineered wood products prior to January 1, 2013, may offset their reported lumber products assessment amounts for one-time start-up costs of $250 per business location.
A business location means a location registered under your seller's permit as of January 1, 2013, where retail sales of lumber products or engineered wood products are made.
Beginning January 1, 2014 lumber retailers that were in business selling lumber products or engineered wood products before January 1, 2013, may retain an additional $485 per business location as reimbursement for their start-up costs.
To claim the additional start-up cost, beginning with returns due on or after January 1, 2014, enter your allowable additional reimbursement cost ($485 per business location) on your lumber schedule in the “Reimbursement Cost Offset” box. Remember, you may only enter a reimbursement amount up to your total reported lumber products assessment per each return. Any remaining allowable reimbursement cost must be taken on subsequent returns as an offset to reported lumber products assessment amounts, including any allowable start-ups costs you may have remaining from 2013 ($250 per business location).If you are eligible for the additional $485 in start-up costs but closed out your business or no longer sell lumber products or engineered wood products subject to the 1% assessment, you may file a claim for refund for lumber products assessment amounts paid in 2013 up to $485 per business location. You may only claim a refund up to the lumber products assessment amounts paid in 2013. You may use form BOE-101 to file a claim for refund (see also Publication 117, - Filing a Claim for Refund).
In general, the lumber products assessment is not due on the following sales:
Sales involving Native Americans follow the same rules as the sales and use tax law. See Sales and Use Tax Regulation 1616, Federal Areas, and publication 146, Sales to American Indians and Sales in Indian Country.
Purchasers, including construction contractors, who purchase lumber products or engineered wood products for use in California who do not pay the one percent lumber products assessment to a California retailer are required to report and pay the assessment directly to the BOE.
This includes purchases of lumber products or engineered wood products from outside of California for use in this state. In general, purchasers responsible for paying the one percent assessment directly to the Board will also be responsible for reporting and paying the use tax. Use tax is a companion to California's sales tax, and is due whenever you purchase taxable items without payment of California sales tax from an out-of-state vendor for use in California. You also owe use tax on items that you remove from your resale inventory and use in California. To pay use tax, report the purchase price of the taxable items under "Purchases Subject to Use Tax" on your sales and use tax return. Those purchases become part of the total amount that is subject to tax.
Construction contractors are either retailers or consumers of lumber products or engineered wood products.
Construction contractors that act:
Construction Contractors that act as a retailer of merchandise (including lumber products or engineered wood products) are required to register with BOE.
Construction Contractors that make purchases of items from outside of California for use in this state (for example, items purchased without tax that are consumed in the performance of a construction contract) are also required to register with the BOE.
For more information about construction contractors, see BOE's publication 9, Construction and Building Contractors.
The lumber products assessment law does not contain an exemption for fixed price contracts.
Therefore, lumber products or engineered wood products sold or purchased on or after January 1, 2013 are subject to the one percent lumber products assessment, even if they are sold as part of a fixed price contract entered into prior to January 1, 2013.
To register, visit our Registration page and follow the instructions. The law requires that you file the lumber products assessment electronically.
When registering online, you will be asked if you sell or purchase lumber or engineered wood products. If you answer yes to either question, your return will automatically include a lumber schedule so you may report and pay the lumber products assessment.
If you need to update your existing account to include the lumber schedule to report and pay the lumber products assessment, please notify the BOE (see below).
If you are currently registered with the BOE and are a retailer of lumber or engineered wood products or will purchase these products from outside of California for use in this state, please call our Customer Service Center at 1-800-400-7115 (TTY:711) so we may update your account.
Purchasers that do not have a seller’s permit and are not required to register for a use tax account as a “qualified purchaser,” can report and pay the lumber products assessment and any applicable use tax on by visiting our Registration page. Select the option to Pay use tax and/or the lumber products assessment on one time purchase.
The Board of Forestry and Fire Protection (Board of Forestry) 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 Board of Forestry 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 Board of Forestry the lumber products assessment does not apply to products where labor has added 'significant value' to them, such as:
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 Board of Forestry's Emergency Regulations when trying to determine if a product is subject to the Lumber Products Assessment.
The following listing is current as of July 1, 2013. We will add additional products as we receive further guidance from the Board of Forestry.
Effective July 1, 2013, the Board of Forestry and Fire Protection (Board of Forestry) determined that these James Hardie products are no longer subject to the 1% lumber products assessment:
Sales or purchases of the above James Hardie products prior to July 1, 2013, for use in California were subject to the 1% assessment.
See our Notice about the James Hardie products.
If you have questions or would like additional information, you may call our Customer Service Center at 1-800-400-7115,
or your local BOE office.