A little known tax credit..

Following is a Mercury News article that I came across today.

Here's a totally legitimate, but not generally known, way for you
and/or your readers to save significant tax money (under certain
conditions).

When my daughter said she was going to rent a car to visit the Grand
Canyon and other out-of-state sites, I told her to be sure to save the
rental invoice and other significant billings for motels, restaurants,
gas stations, national parks, etc.

Tax charged on merchandise rentals is use tax and very different from
sales tax in several ways.

Use tax on rentals does not apply when the item is not in California.

Even though the merchant may be required to collect a use tax, the tax
is legally considered as imposed upon the customer. This means that if
any tax was not due the state can refund it directly to the customer.

I sent photocopies of the documents proving that my daughter qualified
and suggested a proration to exclude her honest estimate of the time
she had spent driving between San Francisco and the state line.

The claim was accepted and soon my daughter had a state check for about $23.

Howard Frohlich
Redwood City

A Howard Frohlich is a retired sales tax auditor and a frequent expert
contributor to Action Line.