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901, 2021

California Department of Tax and Fee Administration Issues Special Notice L-778 and Revokes Special Notice L-698

By |January 9th, 2021|Categories: Tobacco|

In September 2020, the California Department of Tax and Fee Administration (CDTFA) revoked previously issued Special Notice L-698 by issuing Special Notice L-778.  Special Notice L-698 was issued in August 2019 and it attempted to impose an excise tax collection requirement on licensed out-of-state tobacco distributors making sales to licensed tobacco wholesalers located in California.  Special Notice L-698 was controversial when it was issued because the imposition of excise tax on out-of-state distributors required them to collect the excise tax on the non-discounted selling price to its wholesaler customers, contrary to historical practices.  The California Cigarette and Tobacco Products Tax [...]

901, 2021

California Department of Tax and Fee Administration Issues Special Notice L-506

By |January 9th, 2021|Categories: Tobacco|

In September 2017, the California Department of Tax and Fee Administration (CDTFA) issued Special Notice L-506 which provides guidance on the application of excise tax on sales from out-of-state licensed tobacco distributors to in-state licensed tobacco distributors.  In summary, Special Notice L-506 states that the sale from an out-of-state licensed tobacco distributor to an in-state licensed tobacco distributor is not a distribution and therefore does not constitute a taxable transaction for the out-of-state licensed distributor. According to discussions we held with representatives from the CDTFA, the special notice was intended to clarify the long-standing interpretation of the California Cigarette and [...]

505, 2020

California Sales and Use Tax Exemption for PPE and Related Supplies

By |May 5th, 2020|Categories: Exemptions, Medical Industry|

Hopefully you are all staying safe, healthy and sane during this unprecedented time.  We want to make you aware of a new, limited-duration, sales and use tax exemption in California for items such as personal protection equipment (PPE) and the like, when these items are sold to the State during this emergency declaration period. Additional details are included below, but in short, sales to the State of California of PPE and related items are exempt from sales and use tax until Governor Gavin Newsom amends or resends the current State of Emergency order (N-46-20) he issued in response to the [...]

2602, 2020

Which States Tax Medical Devices?

By |February 26th, 2020|Categories: Medical Industry|

Continuing in the vein of addressing fairly broad topics early on with this blog, I will focus this particular posting on the taxability of medical devices.  I will address the topic by looking at each individual state to determine what constitutes a medical device by definition and whether items fitting that definition are taxable or non-taxable pursuant to the applicable law. Clarifying details and/or exceptions will be noted below, but in general, all 45 taxing states (jurisdictions) follow the United States Federal Drug Administration’s (FDA) definition of a medical device: A medical device is "an instrument, apparatus, implement, machine, contrivance, [...]

2602, 2020

Where and When are Medical Services Taxable?

By |February 26th, 2020|Categories: Medical Industry|

I was recently asked by a fellow tax professional whether medical services in general were exempt from sales, use or equivalent taxes in jurisdictions that have an active taxing scheme in place.  I thought I would share my research on the matter just in case the topic presents itself to others in the future. Medical services can be generally defined as services provided by a state board licensed professional in the medical industry, including dentistry, that improve the physical and/or mental well-being of a patient.  While most states exempt medical services, there are a few that choose to tax them [...]