California to add 1% sales tax to many lumber products.

California will impose a 1% sales tax on lumber products and engineered wood products, effective January 1, 2013.

Careful reading of California Assembly Bill No. 1492 is encouraged. Lumber product is here defined as a product “… in which wood or wood lumber is a principal component part, including but not limited to, a solid wood product, or an engineered wood product…” as identified in Section 4629.4 of the bill.  Principal component part “means 10 percent of the total content by volume.”

Lumber product here does not refer to products such as flooring, furniture, bark or cork products, or paper products, among others. All clear?

Engineered wood product is defined as “… a building product, including, but not limited to, veneer-based sheeting material, plywood… or any other panel or composite product where wood is a component part” as identified in Section 4629.4. As with lumber product, engineered wood product includes only “products that consist of at least 10 percent wood.”

Qualified nonprofit organizations may be exempt from the new tax under Section 501 (c)(3), 501 (c)(4), or 501 (c)(5) of the Internal Revenue Code.

To learn more about the new 1% sales tax on lumber products and engineered wood products, please see California Assembly Bill No. 1492.

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