San Francisco Tax Preparation / CPA: CA – Taxpayer failed to provide resale certificates for claimed nontaxable sales for resale

Filed in CCH NEWS FEED by on July 24, 2021

For California sales and use tax purposes, a corporation’s (taxpayer’s) redetermination petition was denied because the taxpayer failed to provide resale certificates for its claimed nontaxable sales for resale. In this matter, the Department of Tax and Fee Administration (department) disallowed taxpayer’s claimed nontaxable sales for resale. The taxpayer manufactured and sold retail displays in Michigan, and argued that it was not liable to pay tax on its sales because the sales were outside California. It was noted that there existed no legal provision that allowed a taxpayer to shift its sales tax liability to another party. Therefore, the taxpayer’s argument that it had an agreement with its customers to pay tax to the department was invalid. Accordingly, no adjustments were warranted to the measure of disallowed claimed nontaxable sales for resale. Harbor Industries, Inc., California Office of Tax Appeals, No. 20035912, March 23, 2021, released May 2021