You may be wondering how sales tax rates are set and why they seem to vary across the state. Here is a brief review of the sales and use tax and then we will break down how California sets its sales tax rate and the various elements that impact the rate.
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The Car Dealer’s Guide To CA Sales & Use Tax Audits – Part 1
Ask anyone who has ever owned a dealership and they will tell you that the car business is a tough one. With all the moving pieces that a dealership faces on a day in and day out basis though, one risk that often gets overlooked by owners is the risk that they face in a sales tax audit.
Most of the “mistakes” that we see in the context of audit preparation are benign. Things like not separating shipping charges properly, people not accounting for time and material costs, things being billed individually, or a failure to adjust sales tax rates for the proper district are little and seemingly harmless mistakes in the context of your business operations. But they will trigger an audit.
What Amazon sellers should do with California’s formal legal demand to Amazon
Hi this is attorney Sam Brockman here with Robin law in San Diego and we’re doing a special video blog post in order to advise Amazon sellers about what to do with the recent information that California has issued a formal legal demand to Amazon so first a little bit of background about me and our firm we’re located in San Diego California and we focus on state specific tax issues and more specifically over the last few years we’ve been helping Amazon sellers and other online sellers get into compliance with the myriad of state and local sales tax laws and state income tax laws that have affected sellers many people have heard about the recent decision in Wayfarer where the court basically blessed South Dakota’s law of allowing an economic Nexus as opposed to the traditional physical presence test and the significance of this is that it opened the door for California and another number of other jurisdictions who had laws on the books concerning economic Nexus to go forward with enforcement efforts and the recent legal demand is part of a trend that we’ve been seeing with California and California has been getting increasingly increasingly aggressive towards out-of-state sellers who California considers having Nexus in California just by lieu of the fact that they’ve been storing products in Amazon warehouses and using Amazon’s FBA system so in many cases there is sales tax liability, but there’s also potentially state income tax liability as well so now here’s what to do about the recent tube and many Amazon sellers today some of them our clients have gotten an email notification from Amazon stating that.
The Good and Bad News for Amazon Sellers
Hi I’m Sam Brotman here with Brotman law in San Diego and this blog post is the good and bad news for Amazon salaries so it’s been any of you got the email and our where California has issued a formal legal demand Amazon and tomorrow Amazon will be turning over its seller information to the state of California so that California can go back and potentially go after people who have not been collecting and remitting sales tax in California so since this email came out last week we’ve spoken with a number of Amazon sellers and I’ve done a number of consulates with people kind of giving them you know the advice that we would give them at a consult based on their particular situation and a lot of the things that come out of those consults are some misconceptions and some misinformation surrounding this process so I wouldn’t take the opportunity to get on with you today and to address a lot of these things because I think they’re important and.
The Truth About CA AB 147 and the Impact on Amazon Sellers
Good Morning this is attorney Sam Brockman with Brotman law here at San Diego and the title of this video blog post is California a B 147 and its impact on Amazon sellers so I’ve been getting a lot of questions over the last two weeks about the proposed legislation in California which is California a B 147 and what it means for Amazon sellers and there has been a great amount of confusion with our current clients with some of the prospective clients that called us and then generally in the community about what the bill is and what it means so I finally had an opportunity to sell out last night and read through the whole bill and so I wanted to share some of my thoughts on what the bill proposes to do what it does not do and then the ultimate impact on the Amazon community as a whole so California a B 147 is a direct response by California to the Wayfarer decision and what that means is the very first thing that a B 147 does is it expands.
Should I Represent Myself in an IRS Audit?
Well it depends, but not usually. First of all, the mistake that a lot of taxpayers make is they think that they can handle the audit because they think either a they’re smarter than the auditor or the errors on the return aren’t really that severe. The problem with that is a taxpayer who goes into a situation with an auditor, unless that taxpayer is a tax attorney or a CPA, is probably not going to have the same level of knowledge about how audits work as the auditor. So even if the taxpayer is familiar with the law, the taxpayer is generally not familiar with the way that audits work and the procedure with that and so the risk is that even if the tax loss is minimal, the taxpayer could potentially put themselves into a damaging situation. So for example, if you’re not really used to changing tires and you get a flat tire on the road, yes you could change the tire yourself. There is the possibility that you’ll do a reasonably good job and change the tire and then everything will be okay, but there’s also the possibility that you might make a mistake. If you believe that there is a mistake on your return and if that mistake is significant, meaning it’s over five thousand dollars in tax back to the government, then you may want to consider hiring a representative to help you because once you get into a situation where there’s an audit and their adjustments are being made, then the penalty conversation comes into play and so the more adjustments that are made on the return, the more it increases
Should I Hire the CPA Who Prepared My Tax Return to Represent Me in an Audit?
So your CPA maybe the best CPA in the world and this conversation is not to suggest it anything negative about CPAs whom we work with all the time, who are a huge asset to our practice and I don’t think any of the CPAs that we work with would have any problem with me saying this. The CPAs generally are not good in audits and they’re not good because they don’t do a lot of audits. From a CPA perspective, a CPA is compliance based. CPAs are focused most of the time on preparing returns and preparing them accurately. They have a whole living based on being a CPA which is a certified public accountant. A certified public accountant is an individual who is certified to prepare financial statements so the reality of the situation is when a CPA is charged with compliance, and if there is any doubt as to that compliance meaning, there are errors on the tax return the CPA prepared, then there’s a natural conflict of interest because either
How Do Sales Tax Audits Work in California?
So here’s how the sausage is made with respect to a sales tax audits. The state decides to audit you, California sends you a letter that says “hey you’re being audited” and then you will respond to that letter and that kicks off the audit process. So from a practical perspective what happens is the government will usually issue an audit request for three years of information or in the case of a sales tax audit, they’re doing it over twelve quarters. So from the outset of a sales tax audit, you need to understand what your risk is. You ideally want to go through the twelve quarters, maybe not in full at the beginning, but at least have a general understanding to know where the pitfalls are in the audit and then depending on where your pitfalls are, that’s going to determine what the plan is with the auditor.
Why Is It Important to Get an Attorney Involved at the Beginning of a Sales Tax Audit?
What Is It Important to Get an Attorney Involved at the Beginning of a Sales Tax Audit?
What Is the Direct Method of Testing in a Sales Tax Audit?
Brotman Law video has all the information you need to know to test during the direct method of the Sales tax audit.