PSA: Business owners in CA, ask "For here or to go?" and tax your non-taxables correctly, because the BOE WILL come for you.

Obviously "for here" is always taxed, and "to go" for non-taxables is generally not taxed.

If you are a small dessert shop, bakery, cafe, or some business that sells items that are generally non-taxable to-go: drinks, bakery items, cold food, etc, you MUST ask the customer: "For here or to-go?" and tax accordingly. You cannot assume. Doesn't matter if it's packaged to-go and meant to be eaten outside. Doesn't matter if you don't have seating. Doesn't matter what they actually do after. You must ask. The BOE will one day come out and audit, stand behind the register for the entire day, for 3 days, to bill you on the last 3 years of business, and you have 3 years to pay.

Several businesses in my area are being audited. Pretty much a majority of them will be hit with a huge bill to pay, enough to put some out of business. Why? Because many of them never ask "for here or to go?" and assume to-go for all sales. And why is this so common? It's not written in the tax law, but the BOE will expect you to know that's just how it's done. The BOE knows how common this is, and still doesn't put it in the updated general publications (most recent is Mar 2016). It is, however, in the audit manual that is dated Feb 2001. They have been leaving this out since then, with what I assume to be a "backdoor" of sorts to audit and fine small businesses. The law is being unlawful here.

Also, make sure your non-taxables are 100% non-taxable. There are many exceptions, like the 80-80 rule, carbonated drinks, combination meals, sold where admission is charged, etc. Some things are just not written anywhere, and if you can't get it in writing from BOE, you may want to tax it.

Fun Sales Tax Fact: Bakery item sold to-go is not taxed, beverage item sold to-go is not taxed; but if you sell them together, it is taxed!

Publications on Sales Tax related to restaurants can be found here: http://www.boe.ca.gov/pdf/pub22.pdf http://www.boe.ca.gov/lawguides/business/current/btlg/vol1/sutr/sales-and-use-tax-regulations-art8-all.html https://www.boe.ca.gov/sutax/manuals/am-08.pdf

First post, be gentle :)

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