On: September 23, 2022

CDTFA Experienced Tax Experts Pasadena

A taxpayer must be aware of numerous tax obligations in California.  In addition to Federal tax liabilities, there are various state tax liabilities.

Many of these state tax liabilities are administered by the California Department of Tax and Fee Administration (“CDTFA”).  In the 2020/21 fiscal year, CDTFA collected over $81 billion of total revenue.

Probably the most significant taxes administered by CDTFA are sales and use taxes.

If you are in Pasadena and trying to resolve a CDTFA issue with sales taxes or use taxes, you need the services of the best CDTFA experienced tax expert in Pasadena.

Sales Taxes in California

Retailers engaged in business in California must register with CDTFA and pay the California sales tax.

The California sales tax applies to all retail sales of goods and merchandise, except those sales specifically exempted by law.  Certain goods, including most non-prepared food items, food stamps, and medical supplies, are exempt from sales tax under California law.  Certain transactions, including sales to government agencies, some nonprofit organizations, and merchants purchasing goods for resale, are exempt from sales tax under California law.  To prove a tax-exempt transaction, sellers are required to collect a valid exemption or resale certificate from buyers.

A retailer collects sales tax from its customers, remits sales taxes to CDTFA, and files sales tax returns with CDTFA.  Retailers who breach these obligations can be subject to interest and penalty charges, as well as owing any outstanding sales tax liabilities.

Use Taxes in California

The use tax in California generally applies to the storage, use, or other consumption in California of goods purchased from retailers in transactions not subject to the sales tax.  This type of use tax is known as a “seller’s use tax”.

The use tax in California also may apply to purchases shipped to a California consumer from another state, including purchases made by mail order, telephone, or Internet.  This type of use tax is known as a “consumer’s use tax”.

The use tax is a companion to the sales tax; it is designed to level the playing field between in-state retailers who are required to collect tax and some out-of-state retailers who are not.

 

Sales and Use Tax Rates in California

 

The sales and use tax rate in California is composed of three parts – a state tax rate, a local tax rate, and any district tax rate that may be in effect.  Thus, sales and use tax rates will vary by location.

For example, the current sales and use tax rate in Pasadena is 10.25%.

Role of a CDTFA Experienced Tax Expert

A CDTFA experienced tax expert can help taxpayers with their sales and use tax issues in California.

First, a CDTFA experienced tax expert can provide representation concerning CDTFA sales and use tax compliance.  Compliance can include such issues as:

• Determining if the taxpayer is legally subject to sales taxation or use taxation in California. This can include analysis of whether the taxpayer has a sufficient connection (often referred to as a “nexus”) to California to be subject to sales or use taxation;
• Assisting the taxpayer with registering with CDTFA;
• Aiding the taxpayer in collecting valid exemption or resale certificates from buyers;
• Advising on what records the taxpayer is required to maintain for sales and use tax purposes;
• Helping the taxpayer timely file sales and use tax returns with CDTFA; and
• Teaching the taxpayer about use taxation in California. Most taxpayers are less familiar with use taxation than sales taxation.

With a CDTFA experienced tax expert, the taxpayer will be in a better position to comply with California sales and use tax laws.

Second, a CDTFA experienced tax expert can provide representation concerning CDTFA sales and use tax audits.  A typical CDTFA sales and use tax audit will involve the following steps:

1. CDTFA usually will notify the taxpayer by telephone or mail about the audit. During this initial contact, the CDTFA auditor will tell the taxpayer about the audit period (usually three years) and ask about the taxpayer’s business operations, including the type of records that the taxpayer keeps.  The CDTFA auditor will also tell the taxpayer what business records to have ready for the audit and ask about a convenient date and location to begin the audit.
2. The CDTFA auditor usually starts the audit with a preliminary examination of the taxpayer’s records. This examination gives the CDTFA auditor some idea of what records are available and the procedures used by the taxpayer to record transactions.
3. The CDTFA auditor then performs tests to determine if a complete audit is needed. For example, for a sales tax audit, the CDTFA auditor may compare the total sales recorded on the taxpayer’s books to the total sales reported on the taxpayer’s sales tax returns, the total sales recorded on the taxpayer’s books to the total sales on the taxpayer’s income tax returns, the amount for tax the taxpayer collected to the tax reported on the taxpayer’s tax returns, and the claimed sales for resale-to-resale certificates.
4. If the tests of the taxpayer’s records indicate possible recording errors, the CDTFA auditor may decide that a more complete examination is necessary. This more complete examination can be made on an actual basis (looking at every transaction) or on a sample basis (looking at selected transactions).
5. When the audit is complete, the CDTFA auditor will hold an exit conference and describe the findings of the audit.
6. There are generally three results to any CDTFA sales and use tax audit:

• No change;
• A change that the taxpayer accepts; or
• A change that the taxpayer does not accept. If the taxpayer does not accept the change, the taxpayer can discuss the matter with the CDTFA auditor’s supervisor or a CDTFA representative, or pursue an appeal.

With a CDTFA experienced tax expert, the taxpayer will be in a better position to address each of the steps of any CDTFA sales and use tax audit.

Leading Tax Group – The Best CDTFA Experienced Tax Expert in Pasadena

If you are in Pasadena and are looking for the best CDTFA experienced tax expert, you need to hire Leading Tax Group (their experienced team consists of a former IRS tax attorney, an experienced payroll tax and sales tax attorney, a retired IRS auditor (of 40+ years), and their own in-house accounting team!).

Leading Tax Group has expansive knowledge of the sales and use tax laws in California.  As a result, Leading Tax Group can advise you on CDTFA sales and use tax compliance issues.

In addition, Leading Tax Group has extensive experience in successfully representing taxpayers in CDTFA sales and use tax audits.  Leading Tax Group understands what to do and what not to do in any California sales and use tax audit to reach a favorable outcome.

With this expansive knowledge and extensive experience, Leading Tax Group is your best choice for a CDTFA experienced tax expert (their experienced team consists of a former IRS tax attorney, an experienced payroll tax and sales tax attorney, a retired IRS auditor (of 40+ years), and their own in-house accounting team!) in Pasadena to help you with any sales tax or use tax issue.

Leading Tax Group has a conveniently accessible office in Pasadena at 225 S Lake Avenue, 3rd Floor.

Whether you are just trying to ensure that you are correctly following the law and are in compliance with California sales and use tax laws or you are involved in a California sales and use tax audit, Leading Tax Group is a critical resource to assist you with your sales and use tax issues.

For the best CDTFA experienced tax expert (their experienced team consists of a former IRS tax attorney, an experienced payroll tax and sales tax attorney, a retired IRS auditor (of 40+ years), and their own in-house accounting team!) in Pasadena, contact Leading Tax Group now at (800) 900-4250 and schedule your free consultation today!