Brotman Law 
The auditors there because they’re clearly looking for something that the IRS has questions on.
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.
It is time once again for that annual rite of passage for every taxpayer: getting the tax return and payment to the IRS on time.
The only people who like taxes are those who collect them, right? But every year most taxpayers fulfill their civic duty, knowing that their dollars support federal, state and municipal infrastructure, healthcare, social security, schools and universities, our veterans, national defense and more.
Even so, most people still dislike paying taxes, but some of us are outright afraid of the tax agencies, both federal and state, and not without reason.
The questions that weigh heavy on the minds of those who are dealing with tax problems usually include whether to hire a tax attorney or a CPA, when to hire a tax attorney, and how to find a good one.
When Led Zeppelin sang about “Going to California,” they were probably blissfully unaware of the potential tax consequences on this side of the pond.
In “The Car Dealer’s Guide To CA Sales & Use Tax Audits – Part 3,” we discussed what happens after a Notice of Determination is issued, California’s special tax districts, DMV registration fees, not-so-secret warranty strategies and the importance of keeping your bill of lading.
In Part 4, we continue with processing transactions such as unwinds and the more complicated rollback. We will also discuss why it is a bad idea to try to avoid paying sales taxes on repossessions.
Finally, if perchance you do get audited, we’ve provided a list of records you should be keeping in your deal jackets and several reasons it would be a good idea to hire an attorney to represent you.
In The Car Dealer’s Guide to CA Sales & Use Tax Audits – Part 2, you learned what to expect if you were the recipient of an audit engagement letter, some common techniques the auditor uses as well as how the interview and records examination will be conducted.
In Part 3 of our guide, we will discuss what happens after a Notice of Determination is issued, a little on California’s special tax districts, DMV registration fees, not-so-secret warranty strategies and the importance of keeping your bills of lading.
In “The Car Dealer’s Guide To CA Sales & Use Tax Audits – Part 1,“ we discussed the CDTFA’s history of targeting car dealerships for sales tax audits due to the high abuse and error in the industry, as well as the complexity of these kinds of audits. We also outlined how auto dealers are selected for an audit.
In Part 2, you will learn what to expect if you are the recipient of an audit engagement letter, some common techniques the auditor will use as well as how the interview and records examination will be conducted.
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.
In this article, we have included some legal cases that set the precedent for current multi-state sales tax laws. Included among them is the historic Wayfair case that broke ground in the area of e-Commerce.
Hopefully, this background will put some of the present law into context. But as always, as the business climate continues to shift and change, so will the laws associated with multi-state taxation.