The California Department of Tax and Fee Administration oversees the collection of sales taxes by more than a half million retail sellers, ranging from giants such as Amazon and Walmart to one-person internet sellers.
The agency audits retailers’ sales tax reports to ensure state and local governments receive approximately $50 billion that the tax — 10% or higher in many communities — generates each year.
One point of potential friction is whether the items being sold are subject to taxation, which is not as simple as one might expect. While generally we may assume that food and prescription drugs are exempt from taxes applied to everything else, in fact there are dozens of other exemptions, and defining them can be quite tedious. A recent case brought before the Office of Tax Appeals illustrates that fact…