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2009, 2019

Audit Methodology 101- What is a Credit Card Test of Sales?

By |September 20th, 2019|Categories: Restaurants and Bars|

The use of a credit card test has become an increasingly popular audit methodology employed by the California Department of Tax and Fee Administration’s (CDTFA) audit staff. It used to be primarily utilized to estimate sales for restaurant and bar establishments but we are finding that the use of this test is becoming more prevalent in other industries as well. The increased use of this methodology is for good reason. When preformed correctly, the test can produce a very accurate computation of a business’ gross receipts. The key to performing the test correctly, as with others, is making certain that [...]

2009, 2019

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

By |September 20th, 2019|Categories: Restaurants and Bars|

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 [...]

1712, 2018

Hospitals & Medical Services: Proposed Changes to CA Reg 1503

By |December 17th, 2018|Categories: Medical Industry|

Last month I participated in an Interested Parties Meeting (IPM) with the California Department of Tax and Fee Administration (CDTFA) to discuss proposed revisions to California Code of Regulations, title 18 (Regulation), section 1503- Hospitals and other Medical Service Facilities, Institutions and Homes for the Care of Persons.  I want to share my thoughts on the proposed revisions because they will have a material impact on hospitals and other medical facilities’ ability to claim refunds of tax related to their Medicare Part A sales. Currently, Regulation 1503, subdivision (b)(2), contemplates a transaction where title to the tangible personal property (TPP) [...]

307, 2018

Supreme Court’s Wayfair Decision Will Force More Remote Sellers to Collect Sales and Use Tax

By |July 3rd, 2018|Categories: Compliance, Interstate Commerce, Sales Tax Law|

Last month we reported that a pending U.S. Supreme Court case, South Dakota v. Wayfair, Inc. (U.S. S.Ct., Dkt. No. 17-494, 06/21/2018), might expand the rights of states to impose their sales and use taxes on out-of-state sellers.  The Court’s June 21, 2018 Wayfair decision has done exactly that. The decision overturned the physical presence requirement, a 51-year-old standard for determining when remote sellers must collect sales or use taxes on behalf of states other than their own.  Now, a state may impose registration and collection requirements even if there is no physical presence inside the destination state in which [...]

1105, 2018

Supreme Court May Change the Nation Sales and Use Tax Landscape in the Wayfair Case!

By |May 11th, 2018|Categories: Nexus, Sales Tax Law|

If you’re doing business in more than one state, you’d best pay attention to a pending U.S. Supreme Court case entitled South Dakota v. Wayfair (2017 S.D. 56, 901 N.W.2d 754, cert. granted, U.S. S. Ct., Dkt. No. 17-494, 01/12/2018).  The outcome will either clarify or expand states’ rights to impose their sales or use taxes on out-of-state sellers. Background Every state with a sales tax also has a complementary use tax.  The purpose of the use tax is to capture any transaction that normally would have been subject to sales tax but somehow escaped the tax, generally because the [...]