If you’re going to conduct business in the state of California, you will need to be aware of how to calculate sales tax. If the business owner is failing to calculate sales tax on certain services it’s possible that they could face severe penalties from the IRS as well as from the California franchise tax board. Managing these tax issues and determining your sales tax liability in California often requires consulting with a CPA. Here are some of the services that are subject to sales tax in California.
It’s quite challenging to determine if the taxpayer needs to consider sales taxes part of their services. In most cases throughout the state of California transactions involving cannabis, personal property or physical property must apply sales-tax but this does not always carry over into a company providing the labor.
In order to appropriately register for sales tax within the state of California, you will need a social security number and date of birth, driver’s license, and several forms of ID, the names of the banks where you opened your business account, the names and addresses of your suppliers, personal references, average monthly sales, and the percentage of your monthly sales that would be subject to sales tax.
If you are running a business that has services or products that are subject to sales tax, you will need to apply for a seller’s permit before you can begin collecting the sales tax. Multiple types of sales can change the amount of sales tax that must be applied to your business and if you’re unsure about what amount of sales tax you should be applying to your business transactions, consulting a CPA will be advantageous for preventing tax problems down the road.
Contact us today and we can assist you with any sales tax concerns you may have in the state of California.
This article was written by Alla Tenina. Alla is one of the best estate planning attorneys in Los Angeles California, and the founder of Tenina law. She has experience in bankruptcies, real estate planning, and complex tax matters. The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information on this website may not constitute the most up-to-date legal or other information. This website contains links to other third-party websites. Such links are only for the convenience of the reader, user or browser; the ABA and its members do not recommend or endorse the contents of the third-party sites.