New California lumber tax a puzzle to many

Thursday, January 10, 2013

Since the first of the year, California retailers have been required to collect an extra 1 percent tax on sales of certain lumber products. The problem? It's not as clear cut as it sounds. Items like plywood, 2-by-4s and unfinished decking, fencing and railings are taxed, but according to the new law, products that have had a little more work done - such as indoor finished flooring, baseboards, doors and windows - are exempt.

Implementing the new tax has been a headache for retailers large and small. Out of thousands of lumber items, retailers must figure out which are taxable (there is no comprehensive list), individually tag those products in their software systems and answer questions from customers about the charge, which must be shown separately on receipts.