Are Tips Subject to Sales Tax in California?
If you’re a restaurant owner that’s been through a California sales tax audit, you probably asked the auditor the above question at some point during the process. The answer you probably received was, “It depends,” or, “Sometimes.” If you’re lucky, you didn’t get further clarification in the form of an audit bill for tax on your employees’ tips.
The underlying principle is deceptively simple: if the amounts of your tips are optional (left up to the customers), and all of the tips are actually distributed to your employees, the tips are […]
This month, James R. Dumler, a senior sales tax specialist at McClellan Davis and featured contributor at Sales Tax Support writes about sales tax on medical and recreational marijuana. Sales Tax Support publishes articles written by experts and thought leaders in the specialized field of sales and use tax with small and medium sized business owners in mind.
First, let me discuss what the unit is supposed to be doing. The mission of SCOP, at least in theory, is one that’s beneficial to taxpayers. In short, they are supposed to be educating business owners on their sales/use/property tax responsibilities. In a business […]