SCCQG Meeting notes – 1 October 2016 - Speaker: Fred Duenas, Retired State Board of Equalization

Auditors look for whether you are paying the proper tax, whether the tax has been under reported. The BOE shares a lot of information with other state and federal agencies.

Who must obtain a seller’s permit?

  • Engaged in business in CA and intend to sell tangible property
  • In CA you’re the retailer or the consumer.
  • Retailer sells tangible personal property
  • Real property (home, condo) is exempt. Materials were taxed.
  • Non -profit organizations are exempt from income tax, but they are treated no different from anyone else that is in business selling tangible personal property. Non profits must pay sales tax for the sale of tangible goods.
  • Only need permits for temporary events
  • What does engage in business mean?
  • You are engaged in business even if you are located out of state
  • Amazon is a good example. QVC is another.
  • Affiliates of Amazon that are people selling from within CA are subject to sales tax
  • Amazon now has an in-state facility and therefore, sales tax applies
  • Tax rate is the same for sales or use tax.
  • Sales tax is property sold at retail.
  • Use tax – tangible personal property from out of state
  • There is a line item on your CA state tax form to list use tax
  • Tax audits things coming into the state by truck/rail
  • One-time sale, not required to have a permit
  • Special event, where you are selling tangible personal property you need a temporary seller’s permit. This allows you to charge sales tax.
  • Post notice – All sales are sales tax included or
  • Post notice – sales tax will be added to the purchase amount
  • If you don’t have a permit you should not be collecting tax
  • Garage Sale – typically do not need a permit (unless you have more than 3 garage sales in 2 mo.)
  • CA Use tax –
  • No exemption for nonprofits or religious organization. Exemption is for income tax.
  • An auction applies as a “sale”
  • Sales tax rate – State local county tax rate is 7.5%. Anywhere in CA.
  • District taxes – LA county, for example, some cities may add additional rates. Tax rate in San Clemente is 8%; in Inglewood it’s 10%.
  • 58 counties in CA. Not all counties have district taxes.
  • Temporary Sellers permit or annual sellers permit
  • Make sure you have good records recording sales, etc.
  • Fabrication labor – (i.e., long arm quilters) it is a business and therefore FAIR (fabrication, assembly, installation (exempt), repair (exempt). Long arm quilters should charge tax.

Discussion re different types of non profit status - Difference between 3 and 7 –

  • C3 – charitable/education group
  • C7- social group – no tax deductible donations.

SCCQG Treasurer, Kennalee Mattson, then went over the various forms and reporting requirements for guilds. Forms and links to information are posted in a separate file.