Sales & Use Tax Studies and Compliance

What is Sales Tax?

Sales tax, also known as Retail Sales Tax, is a tax generally applicable to all retail sales of goods and merchandise, including some services from a seller to a consumer. This tax is legally imposed to the seller to collect from the buyer and transmit to the appropriate governing agency. There are exemptions for resellers who purchase the goods to resell so they are not the end consumer.

What is Use Tax?

Use tax is a tax generally applicable to the use, storage, or other consumption of taxable goods purchased from retailers which no sales tax has been paid. It is also applicable to out-of-state purchases that are shipped to consumers, including purchases made by mail order, telephone, or internet.

California Department of Tax and Fee Administration (CDTFA) is the taxing authority. Retailers engaged in business in California must register and obtain a seller’s permit. Those who are not required to register for a use tax account as a “qualified purchaser” and don’t have a seller’s permit, may report and pay use tax to the Franchise Tax Board (FTB) on the California income tax return.

Sales & use tax is calculated based on the sum of the state tax rate, local tax rate, and any district tax rate that may be in effect.

The filing due dates may be quarterly or annually. Some businesses may be required to make prepayments on a monthly basis.

Our professional tax experts are here to help you and your business on sales & use tax compliance functions. These services include the preparation of sales & use tax returns, filing the return in a timely manner, and making tax payments.