California Sales Tax Audit Archives

Use Tax vs Sales Tax in California: Differences Compared

July 5, 2026January 18, 2023 by Brotman Law

Sales tax and use tax are the same tax at the same rate — the difference is who pays it and when. Sales tax is collected by a California seller at the register; use tax is owed by the buyer when tax wasn’t collected on a taxable purchase (an out-of-state or online seller that didn’t charge it, inventory pulled for your own use, equipment shipped in from another state). The rate is your location’s combined rate — the 7.25% statewide base plus district taxes — and the CDTFA audits businesses for unreported use tax constantly, because almost nobody self-assesses it correctly.

By Sam Brotman, JD, LLM, MBA · Last updated July 2026

It’s really important you’re aware of the use tax vs sales tax differences: how they’re applied, when they’re applied, and in what instances they might apply to you.

Key Takeaways

It’s really important you’re aware of the use tax vs sales tax differences: how they’re applied, when they’re applied, and in what instances they might apply to you.
The difference between sales and use tax comes to the fore in the case of tax audits, and is an area you should take time to be clear on.
In California, taxpayers often claim deductions for resale of their property, which is a frequent target for the California Department of Tax and Fee Administration (CDTFA).

As with anything tax-related, it’s not always straightforward.

So, join us as we answer questions such as “what is the difference between sales tax and use tax” and “is use tax the same as sales tax”.

Your Rights as a California Taxpayer

May 25, 2026April 30, 2021 by Brotman Law

Key Takeaways

The California Department of Tax and Fee Administration (CDTFA) administers the tax program for both business and property taxes for the State of California.
Sales and use tax
Fuel tax
Cigarette tax
Alcoholic beverage tax

Business taxpayers may take up their concerns directly with the main office of the CDTFA while property tax concerns are addressed by the local county office.
When you deal with the tax agencies of California, you may feel like you do not have any rights.

The California Department of Tax and Fee Administration (CDTFA) administers the tax program for both business and property taxes for the State of California. Business taxes include:

Establishing Residency or Domicile in California Can Be Taxing

July 5, 2026March 3, 2021 by Brotman Law

Robert Wood, tax expert and frequent contributor to Forbes.com, wrote that “many would-be former Californians have unrealistic expectations about establishing residency in a new state. They may have a hard time distancing themselves from California, and they may not plan on California tax authorities pursuing them.”

Key Takeaways

Guidance Questions of Facts
Temporary or Transitory Purposes
What About Domicile?

What Are the Penalties for Tax Evasion and Tax Fraud in California Sales Tax Audits?

May 25, 2026November 23, 2020 by Brotman Law

Tax attorney consultation at Brotman Law

California Tax Evasion Penalties Generally

Key Takeaways

Generally, penalties for fraud or intent to evade are imposed only when tax deficiency determinations are made by the CDTFA and CDTFA must prove evasion to impose tax evasion penalty.
“Fraud” is defined as acts with intent to deprive state of taxes due under the law. Intent to evade is intent to escape paying tax through misrepresentation or deception.
The size of the deficiency in relation to the tax reported is always be taken into account. The higher the understatement of tax, the more CDTFA is inclined to consider that there was tax evasion.

Generally, penalties for fraud or intent to evade are imposed only when tax deficiency determinations are made by the CDTFA and CDTFA must prove evasion to impose tax evasion penalty. The RTC sections that impose evasion penalties are as follows:

How the California Sales Tax Audit Defense Practice Works with Brotman Law

May 25, 2026November 21, 2020 by Brotman Law

Sales tax audits are one of the areas of practice that I am most proud of at our firm. We have dealt with some very difficult cases and gotten some really phenomenal results. I credit that to the hard work and diligence of our team. Brotman Law really understands sales tax audits.

Key Takeaways

Sales tax audits are one of the areas of practice that I am most proud of at our firm. We have dealt with some very difficult cases and gotten some really phenomenal results. I credit that to the hard work and diligence of our team.
We understand the tax law surrounding why sales are taxable and why they are not taxable.
Finally, we understand statistical sampling which is a very rare quality in attorneys. Most attorneys do not have a strong knowledge of statistics. It is not something that they teach you in law school.