Los Angeles City High School District v. State Board of Equalization (1945) 71 Cal.App.2d 486. 500, adds an uncodified section as follows. (a) With respect to sales of diesel fuel made during the period of April 1, 1988, through September 30, 1988, a purchaser entitled to either a direct refund or credit against his or her income tax for the federal excise tax paid may so certify to the seller of the diesel fuel not later than December 31, 1988, in a form prescribed by the board. The seller shall return the amount of the refund or credit to the purchaser.

• The purchaser remits this tax directly to the taxing jurisdiction.
• VAT rates differ by country but range from 5% to 25%.
• Eating Out Look closely next time, and you may discover that your tax at a restaurant is sometimes higher than the sales tax you pay across the street for clothing and other daily goods.
• A taxable sale includes the reconditioning of tangible personal property by delivery to the customer of reconditioned property which has been commingled with the same kind of property as the customer originally delivered to the reconditioner.
• Cedars-Sinai Medical Center v. State Board of Equalization (1984) 162 Cal.App.3d 1182.

1707, effective January 1, 1985, substituted “determined” for “specified” after “Mobilehome as” in (a), deleted “If the value … purchase documents,” before last sentence in (a). 1539, effective January 1, 1986, substituted “specified” for “determined”, added “if the value … by purchase documents” in subdivision (a), deleted “and the … or used” before “shall exclude” in subdivision (b), deleted repeal language and added “for the … documentation fees” in subdivision (c). Allowance for “trade-in.”—The value fixed by agreement between seller and buyer of property exchanged as a part of the purchase price of other property, rather than the appraised or market value, constitutes “gross receipts” upon which the tax is imposed. The difference between the agreed and appraised values is not deductible from gross receipts as a cash discount. Hawley v. Johnson (1943) 58 Cal.App.2d 232.

Communication Service

1970, p. 2133, in effect November 23, 1970, reworded (e)(4). 1971, p. 3833, operative January 1, 1972, added parenthetical reference to section 6091 in (b). Deleted the words “for-hire” following “equipment for use in”, made reference to section 6023 and deleted examples of mobile transportation equipment in (e)(4). 285, operative July 1, 1980, added (e) (6). 1068, effective September 26, 1980 deleted “establishes to the satisfaction of the board that the lessor” following “transferor as to which the lessor” and substituted “lessor or transferor has paid sales tax” for “retailer has reported and paid the sales tax to the board” following “with respect to which the” in (e) (5).

However, unlike tangible goods, services are often not taxed because of legislative inaction rather than action. States typically defined only tangible goods as taxable purchases when general sales taxes were established roughly a century ago. Thus, to tax most services, states must specifically add these purchases to their tax base via legislation (a politically challenging task).

Discretionary Sales Surtax

The tax base—what is and isn’t taxable—can have a significant impact on the competitiveness of different sales tax regimes and the efficiency with which they raise revenue. When a tax on goods or services is paid to a governing body directly by a consumer, it is usually called a use tax. Often laws provide for the exemption of certain goods or services from sales and use tax, such as food, education, and medicines. A value-added tax (VAT) collected on goods and services is related to a sales tax.

The federal government’s per-gallon tax of gasoline (beginning at one cent per gallon in 1932) and per-package tax of cigarettes ($1.01 per package since 2009) are the most well-known current sales taxes administered by the federal government. Conversely, some products carry special taxes, known as excise taxes. “Sin taxes” are a form of excise tax, such as the local excise tax of $1.50 New York City charges per pack of 20 cigarettes on top of the State excise tax of $4.35 per pack of 20 cigarettes. In addition to state sales and use tax and discretionary sales surtax, Florida law allows counties to impose local option transient rental taxes on rentals or leases of accommodations in hotels, motels, apartments, rooming houses, mobile home parks, RV parks, condominiums, or timeshare resorts for a term of six months or less. For a list of local option transient rental taxes, visit the Department’s Local Option Taxes webpage.

Open a business

558, in effect January 1, 1991. 286, in effect July 21, 1994, but operative January 1, 1995, deleted “and before January 1, 1995” after “section” in subdivision (c) and deleted former subdivision (d) which would have repealed the section effective January 1, 1995. (b) The performance indicators and data collection requirements to enable the Legislature to determine if the tax exclusion is meeting, failing to meet, or exceeding its specified goals, purposes, and the objectives are the California Department of Tax and Fee Administration’s estimate of utilization. “Exploitation” includes each and every act comprising part of any phase of the process of exploiting all or any qualified motion picture, whether before or after commencement of principal photography. (6) “Rights relating to any qualified motion picture” includes, but is not limited to, any and all rights to produce or exploit all or any part of the qualified motion picture by any means and in or through any medium. (5) “Transfer” means any change of title or possession in any manner or form by any means whatsoever, conditional or otherwise, including, but not limited to, any sale, assignment, exchange, lease, license, or barter.

• General Business Systems, Inc. v. State Board of Equalization (1984) 162 Cal.App.3d 50.
• Sales tax is generally added to the sales price and is charged to the purchaser.
• So although the result is similar to a sales tax, which is collected just once, VAT differs because each stage of production incurs a tax.
• State general sales taxes apply to the purchase of all tangible goods unless the state explicitly exempts the purchase from tax.
• (c) This section shall apply to acquisition sale and leaseback arrangements executed on or after the operative date of this section.
• Transportation Corp. v. State Board of Equalization (1994) 8 Cal.4th 868.

For more information, see our Marketplace Fairness webpage. 1943, p. 2455, operative July 1, 1943, deleted provisions relating to meals served students and employees, related provisions being enacted as Section 6363. 1943, p. 2620, operative July 1, 1943, added (c). 85, in effect June 30, 1991, operative July 1, 1991, lettered the former first and second paragraphs as subdivisions (a) and (b), respectively; renumbered former subdivisions (a), (b), and (c) as paragraphs (1), (2), and (3), respectively; substituted “the” for “such” after “on https://kelleysbookkeeping.com/ behalf of”, in subdivision (b); and added subdivision (c). “Seller.” “Seller” includes every person engaged in the business of selling tangible personal property of a kind the gross receipts from the retail sale of which are required to be included in the measure of the sales tax. Transportation charges.—Separately stated charges for transportation are included in gross receipts and subject to tax where the merchandise is consigned to the buyer and shipped f.o.b. cars at the destination point, transportation charges collect and allowed.

184, in effect July 11, 1983, operative January 1, 1984, added the second paragraph. 1246, repealed former section and added present section operative January 1, 1981. (4) “Porches” or “awnings” which are not purchased as a part of the original Sales Tax Definition housing package. (1) A “mobilehome,” as defined in Section of the Health and Safety Code. (3) “Sectionalized housing,” which generally consists of two modules which form a total living unit. 21 (AB 119), in effect June 27, 2017.

Action Trailer Sales, Inc. v. State Board of Equalization (1975) 54 Cal.App.3d 125. State general sales tax rates in 2022 range from 2.9 percent in Colorado to 7.25 percent in California. After Colorado, the next-lowest state general sales tax rate is 4.0 percent in Alabama, Georgia, Hawaii, New York, and Wyoming. California is the only state with a state general sales tax rate above 7.0 percent, but the state general sales tax rate is exactly 7.0 percent in Indiana, Mississippi, Rhode Island, and Tennessee. There are currently statewide gross receipts taxes in Delaware (gross receipts tax), Nevada (commerce tax), Ohio (commercial activity tax), Oregon (corporate activity tax), Tennessee (gross receipts tax), Texas (franchise tax), and Washington (business and occupation tax).

For example, a bottle of wine that normally costs $9 may have an excise tax of $3 on it. The end result is that you will pay $12 for that bottle of wine. If you’re a consumer buying a car from New Hampshire, to be stored in Vermont, and you didn’t pay sales tax on that item when buying, then you may be charged use tax by the state of Vermont.

As of 2020, local sales taxes were collected in 38 states. In some cases, local sales tax rates can rival or even exceed state rates. Since sales taxes are imposed at the point of sale, merchants and service providers are responsible for collecting the tax and submitting it to the state. This requires many businesses that are likely to collect sales taxes to register with a state agency for a permit. This imposes an obligation on all merchants and service providers within a state to maintain records of all sales taxes collected and to make periodic payments to the government.

Sales tax revenue benefits the people of the jurisdiction through public schools, public safety, roads, and public libraries. Sales tax is not required if the business does not have a nexus, or connection, with a jurisdiction. However, a 2018 Supreme Court case, South Dakota v. Wayfair, made it easier to establish a nexus. A business establishes a connection if it has a physical presence in a state. This physical presence can be an office or warehouse, or having a sales representative or contractor in the state. A business may also have a nexus based on the number of transactions or amount of sales derived from a particular state.

Nexus is an important concept that determines which businesses do, and don’t, have to collect sales taxes in a given state. Prior to 2018, nexus was the major factor in determining sales tax requirements, and companies only had to collect sales taxes in states where they had a physical presence. Imposed by both state and local governments, sales taxes make up the largest source of tax revenue for states throughout the country. The consumer pays the sales tax to the retailer in addition to the cost of the item or service.