California Corner: The California Department of Tax and Fee Administration Tax Guides
This summer, the California Department of Tax and Fee Administration (CDTFA) posted a new comprehensive Tax Guide for Event Planners to help them (and tax practitioners) understand their tax obligations. Here’s a summary of the key points:
Tax Guide for Event Planners – Key Topics
- Sales and Use Tax Application: Event planners may be subject to sales tax on certain services and products they provide.
- Consultation Services and Planning: Mandatory charges for professional planning or coordination are taxable if connected to sales of tangible personal property.
- Tips and Gratuities: Optional tips are generally not taxable, but mandatory service charges are included in taxable gross receipts.
- Accommodations: Charges related to sales of tangible personal property are subject to sales tax, while others are not.
- Formal Wear: Charges for leasing formal wear are typically subject to tax.
- Florist Services: Charges for floral arrangements may be subject to tax.
- Event Planning as an Agent: The guide outlines specific requirements for event planners acting as agents for their clients.
Other California Tax Guides Available
CDTFA offers numerous industry-specific and tax-specific guides, including:
- Agricultural Industry
- Auto Repair Garages
- Cannabis Businesses
- Construction Contractors
- Gas Stations
- Restaurant Owners
- Winemakers and Distributors
Tax and Fee Guides:
- Cigarette and Tobacco Products
- Fuel Taxes and Fees
- Lead-Acid Battery Fees
- Marketplace Facilitator Act
- Use Tax Collection Requirements
Other Guides:
- Home-Based Businesses
- Nonprofit Organizations
- Out of State Retailers
- Tax Practitioners
- Veteran’s Tax Topic
These guides are designed to provide basic information on key California tax and fee issues for various industries and topics. The CDTFA regularly updates and adds new guides to assist businesses in understanding their tax obligations.
IRS Industry-specific Audit Technique Guides:
The IRS has a much longer list (ninety and counting) of industry-specific Audit Technique Guides, which are similar in concept to the CDTFA’s industry-specific tax guides. ATGs provide guidance for IRS examiners on specific industries or issues, intended to help examiners conduct audits more effectively and consistently.
Tax Practitioner Planning:
Both the California guides and the IRS guides are good for you to review if you are unfamiliar with the industry of your client’s new business. The guides may also help your client who is considering an industry new to them to know the compliance details that California provides and the tax issues that the IRS highlights for their examiners.