Mitchell Stradford

About Mitchell Stradford

Mitchell Stradford is a former senior sales and use tax auditor with the California State Board of Equalization. Mitch leads McClellan Davis’ efforts to advocate on behalf of the cigarette and tobacco industry. He graduated from California State University Sacramento with a B.S. in Business Administration with a concentration in accountancy. Email Mitchell

Restaurants and Caterers Beware – Facility Rental Charges are Generally Subject to Tax

Restaurants commonly make their banquet rooms available for large parties to hold special events such as birthday parties, wedding receptions, and retirement parties. Most restaurants, however, are unaware of the potential sales tax assessment that may accompany the rental charges for these facilities.

A common practice is for the restaurant to offer the rental of its banquet room for a flat fee and then separately offer an abbreviated menu from which its customers choose the meals for their guests. The food and drinks are often served at a price per person under these arrangements.

Restaurants generally understand that food and drinks served […]

Southern California Medical Marijuana Dispensaries be on the Look-out

In recent months, our firm has seen a significant increase in the Board of Equalization’s (BOE) audit activities as they relate to medical marijuana dispensaries, and even more specifically as they pertain to the Los Angeles area.  The BOE audit staff has been targeting the local dispensaries in its sales tax audit activities and has been performing audits that are not being completed in accordance with the BOE’s established audit procedures.  The result of the BOE’s renewed focus on medical marijuana dispensaries, in conjunction with their unorthodox and inappropriate audit procedures, is leaving many tax compliant marijuana dispensaries with undeserved, […]

Board of Equalization Audit Procedures Put Bars at Risk of Overstated Audit Liabilities

Fotolia_93991126_S_Restaurant_tableThe Board of Equalization (BOE) often selects bars for sales and use tax audits. The fact that bars can deal with a significant amount of cash, and can often times have more relaxed financial controls than other types of businesses, make them an ideal target in the eyes of the BOE. In the audit of a bar, an auditor will generally examine the business’ sales records and then seek to verify the recorded amounts with a markup analysis. The markup analysis contains intricate computations and the auditor’s inability to identify certain intricacies […]

Board of Equalization Aggressively Pursuing Independent Auto Dealers for Additional Sales Tax with a New, Questionable Audit Methodology

This month, Mitchell Stradford, a senior sales tax specialist at McClellan Davis and featured contributor in the April issue of the Independent Automobile Dealers Association of California (IADAC) magazine, shares how the California Board of Equalization is aggressively pursuing independent auto dealers for additional sales tax with a questionable new audit methodology.  IADAC is the only association that provides representation before regulatory agencies and advocates fair legislation on behalf of independent dealers and their customers.

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Visit www.iadac.org to read Mitchell’s informative article “Board of Equalization Aggressively Pursuing Independent Auto Dealers for Additional Sales Tax with […]

California Board of Equalization Members Weigh in on Pending Medical Marijuana Legislation

On March 30, 2016 the California Board of Equalization (BOE) held a public discussion regarding pending medical marijuana legislations SB 987 and AB 2243.  Representing the legislature was Senator Mike McGuire’s Chief of Staff, Jason Liles.  The central focus of the discussion was SB 987’s introduction of a 15% tax on sales of medical marijuana that would be collected by retailers.  The anticipated revenue to be generated by this tax is estimated to be $251 million dollars with the caveat that retailers would be in 100% compliance.  The bill is set to go into effect on January 1, 2018.

New Marketing Practices Increase Sales and Use Tax Audit Risk for MetroPCS Retailers

Early in 2015, MetroPCS introduced a new marketing campaign to attract additional customers to its products and services.  The marketing campaign allows customers to receive an instant “rebate” for a portion of the purchase price for a new phone.  After the phone is purchased, the authorized dealer is subsequently reimbursed by MetroPCS for the instant rebate that was provided to the customers at the time of sale.  This marketing practice is common with other cell phone dealers as well, such as AT&T and Verizon, and it generally comes with the requirement that the customer sign a long term contract with […]

Medical Marijuana Regulation & Safety Act (MMRSA)

In September 2015, the California state Legislature and Governor Brown passed AB 266, AB 243, and SB 643 which laid the initial groundwork for state and local government oversight and administration of medical marijuana.  The three bills, commonly referred to as the Medical Marijuana Regulation & Safety Act (MMRSA), grant various levels of authority to the California Department of Food and Agriculture, California Department of Consumer Affairs, the California Department of Public Health, and the California State Board of Equalization (BOE).

On February 10, 2016, Board Member Fiona Ma hosted a stakeholder panel […]

Questionable Tax Audit Procedures for California Marijuana Dispensaries

Marijuana dispensaries have become one of the primary targets for sales and use tax audits performed by the State Board of Equalization. The historical treatment of marijuana as an illegal drug (which is still the case at the federal level), auditors’ underlying political beliefs, and the unusual audit methodologies employed for marijuana dispensaries, can often result in overstated liabilities. A general awareness of the audit procedures and the issues to look out for can help marijuana dispensaries avoid unnecessary and lengthy disputes with the Board of Equalization audit staff. This article addresses some of the intricacies and pitfalls of observation […]

McClellan Davis Lobbies for Taxpayer Safeguards

Tobacco products that are “lost through theft” are currently deemed to have been distributed and are thereby taxable.

The Board of Equalization Tax Policy Division is in the process of proposing two additional regulations for the Board’s approval at the January 2016 Board Meeting.  The two regulations- 4076, Wholesale Cost of Tobacco Products and 4001, Retail Stock are intended to provide definitions for the wholesale cost of tobacco products and retail stock, respectively, as they relate to the Cigarette and Tobacco Products Tax.

McClellan Davis is working in conjunction with staff from Board […]