California – Tax Guide for Grocery Stores

SALT Report 3093 – The California State Board of Equalization released a tax guide for owners, managers, and operators of grocery stores.  The guide provides basic information regarding the sales and use tax laws specific to this industry.

The guide is divided in to the following categories:

Getting Started – This section discusses how to register for a seller’s permit, filing returns, account maintenance, required licenses, sales and purchases of cigarette and tobacco products, and other tax or fee programs that are applicable to grocery stores.

Industry Topics – This section discusses the basics of sales and use taxes; seller’s permit requirements; cigarette and tobacco product licenses and buy-downs; sales of prescription drugs, over-the-counter medicines and diabetic supplies; taxable and non-taxable sales; newspapers and magazines; hot prepared foods; CRV; food stamps; coupons and rebates; lottery sales; purchases for resale; business expenses; and inventory control.

Reporting Methods – This section discusses the most common reporting methods used by grocery stores; for example, electronic scanning systems, the retail inventory method, and cost plus markup of taxable merchandise.  In addition, the guide discusses some of the more complicated reporting issues, such as deductions, bad debts, and losses.

Resources – This section provides links to information discussed in the guide as well as to forms and publications, statutory and regulatory information, seminars, and access to live help from BOE customer service representatives.

For Further Information

California State Board of Equalization – Tax Guide for Grocery Stores