Decision Gives Travelers a Break : Tax: Those shoppers who were recently asked to pay a fee for items purchased overseas will get their money back. But it may not always be that way.

If you’re one of the 3,962 California travelers who received a use-tax note from the State Board of Equalization recently stating that you owed money on purchases made abroad, you can throw it out.

If you have already made the payment (about 800 payments were received, totaling $110,000), don’t worry; your check will be returned. Moreover, no new use-tax notices will be sent out, since the pilot program to collect this previously obscure tax has been put on hold.

That’s the good news. It is, however, still a good idea to watch what you spend while shopping abroad, since chances are that the use tax, which dates to 1935, will be reimplemented at some point.

Funding to enforce the use tax is part of the Board of Equalization’s 1990-91 budget proposal to the State Legislature.

“If the program is reimplemented, there will be substantial advance notice to consumers and the travel industry,” said a Board of Equalization spokesman.

Lack of prior notice regarding enforcement of the use tax, known officially as the Consumer Use Tax Return, created an uproar last month when people began receiving notices of unexpected debts. The use tax is applied to items that residents of the state buy outside of California, then bring home.

If and when the program is reinstituted, tax bills may be sent out quarterly and purchases will be taxed on the basis of which county you live in. The rate is 6.50% in Los Angeles and San Diego counties, 6% in Orange County.

Authorization giving the Board of Equalization access to U.S. Customs records was the major factor that activated the dormant tax.

The board has requested that customs include some notice of the use tax in new printings of its “Know Before You Go” pamphlet. Airlines also are working on ways to alert passengers to this tax.

Travel agents, too, are busy notifying clients. Henry Chase of Chase Travel in Glendale said that he learned of the tax from a client who was assessed $104.96 after reporting purchases of $1,555 to customs in December, 1989. “I’m sending memos out to all my clients, advising them about this use tax in California,” Chase said.

In addition to a forewarning about any new start-up of the use-tax program, travelers will have at least 30 days from the date of the tax-due form’s arrival to make their payments. Late payments may incur penalties.

Only travelers bringing in items valued at more than $400 are affected. Items purchased for less than $400 don’t have to be itemized on the declaration form, and no duty is required.

Travelers coming back through a U.S. possession or territory such as the U.S. Virgin Islands, Guam or American Samoa can claim an $800 duty exemption. However, more than half of the items must have been bought in a U.S. territory.

For example, if you’ve been on a Caribbean cruise and bought $600 worth of goods on the Dutch island of Curacao and $200 on St. Thomas, a U.S. possession, you would get a $400 exemption on the Curacao-bought goods and a complete exemption on the St. Thomas items. You would pay duty on $200 of the Curacao purchases.

Conversely, if you bought $600 worth of goods in St. Thomas and $200 in Curacao, you would pay no duty.

John Miller, a customs spokesman, recommends that travelers, as a supplement to their receipts, keep a record of items and in which country they were purchased.

“Itemize each thing you buy in each country and the price it was worth, in dollars,” Miller said. “The declaration form is somewhat small, and this notebook can alleviate guesswork.”

Actually, these items don’t have to be bought. You could have gotten them as a gift, found them, etc.

Consequently, the Board of Equalization spokesman suggested that consumers indicate what portion of their declaration represents gifts: “Indicate legibly on the form if something is a gift. If the amount of the gift is large, we might seek documentation.”

Information on gifts from abroad is available to the Board of Equalization, although California hasn’t requested it yet. Any unsolicited gift sent to the United States from abroad is entitled to a $50 exemption ($100 if it’s from a U.S. possession) from U.S. Customs. When buying gifts abroad, be aware that the use tax may eventually apply to gifts above a certain amount.

“Travelers should also realize that the use tax will still apply to items they buy as gifts to give other people,” said the board spokesman. Moreover, the use tax is in addition to whatever duty you pay on your purchases to customs.

Exemptions are based on the retail value of the goods where bought or otherwise obtained, not U.S. prices. Also, travelers must be gone from the United States for at least 48 hours and must not have claimed an exemption within the last 30 days.

If you return from Canada within 48 hours, you only get a $25 exemption per person. Returning from Mexico you can get the $400 exemption even if you stay less than 48 hours, but the 30-day limitation applies.

The head of the family can still make a joint declaration for all members of his or her family (if living in the same household). Accordingly, a family of four can bring in $1,600 worth of articles duty-free and with no itemization, even if two members of the family are minors.

Also, the Generalized System of Preferences is still in effect. This is a system whereby the United States helps developing countries--more than 70 in all, including Antigua, Brazil, Costa Rica, Nepal, Pakistan, Congo and Uganda--by permitting some of their goods to be brought in duty-free.

These goods must be purchased in the nation that produces them, not another country. Among popular items are baskets, Chinaware, jewelry, carvings, toys and furniture.

Although the temptation to undervalue items is always there, customs is good at assessing the value of merchandise. “The additional tax might be an incentive to some people to decrease the value of items in their declarations, but we’ll be extra vigilant,” Miller said.

Some people have figured out that the way to evade the use tax is to return to the United States through a non-California gateway and then get a connecting flight home. If your purchases are really on the high side, the extra travel costs might justify this trick.

The Board of Equalization, however, is working on plugging this loophole. It is also looking at ways to eventually exchange information with other states, which may have such a use tax on their books, and which may also start applying it.

Meanwhile, customs has several other free brochures that are worth looking at, including “GSP & The Traveler” and “Pocket Hints.”

Copies are available at the customs office at the departure level at Bradley Terminal, Los Angeles International Airport, or by contacting U.S. Customs, 300 S. Ferry, Terminal Island 90731, (213) 514-6721.