Tax Guide for Veteran's Tax Topic
We recognize that understanding tax issues related to veterans can be time-consuming and complicated, and want to help provide the information you need. We have created this page to help you better understand the Sales and Use tax and Property tax topics that are important to veterans and veteran's organizations.
Sales and Use Tax Overview
If you own a business in California and you expect to be making taxable sales, you must register with the California Department of Tax and Fee Administration (CDTFA) for a seller's permit and file regular sales and use tax returns. Generally, sales tax applies to a veteran's sales as it would to anyone else. However, there are laws that allow qualified veterans and veteran's organizations to make certain sales which are not subject to tax.
Property Tax Overview
The CDTFA works with county assessors to ensure property tax laws and assessment issues are administered correctly. While there is no general property tax exclusion for veterans, there are laws that reduce the property tax due for qualified veterans and veteran's organizations.
Please review the information below to see what specific tax topics relate to you:
If you are a veteran who owns a limited amount of property, that is, $5,000 or less if you are single and $10,000 or less if you are married, you may be eligible for the Veterans' Exemption. This exemption provides an exemption from property tax on the full value of your property up to $4,000 in value.
If you are a qualified disabled veteran, you may claim the basic Disabled Veterans' Exemption from property tax on your principal place of residence up to $100,000 on the full value of your property or a low-income exemption up to $150,000.
The Disabled Veterans' Exemption provides a more advantageous exemption than the Veterans' Exemption and Homeowners' Exemption. Therefore, if you qualify, you should choose this exemption in lieu of the Veterans' Exemption or the Homeowners' Exemption.
Itinerant Veteran Vendor
Sales and Use Tax
If you are a qualified itinerant veteran vendor, you are the consumer of items owned and sold, except alcoholic beverages or items sold for more than $100, and you are not required to hold a seller's permit. Instead, you must pay sales tax on your purchases of all taxable items that you intend to sell.
Qualified itinerant veteran vendors are those who:
- were honorably discharged from the United States Armed Forces,
- are sole proprietors with no employees,
- have no permanent place of business in this state, and
- are unable to obtain a livelihood by manual labor due to a service related disability.
Examples of qualified itinerant veteran vendors include:
Swap meet or flea market vendors, lunch wagon operators and coffee cart providers.
Examples of goods and services commonly sold by qualified itinerant veteran vendors include:
Groceries, meals, firewood, Christmas trees, fireworks, automotive tools, interior design services, home repair services, landscaping, computer repair, mobile windshield repairs, vitamins, cosmetics, clothing, curtains, appliances, electronic goods, furniture, rugs, computers, kitchenware, jewelry, books, flowers, magazines, art, and souvenirs.
For more information, please see Revenue and Taxation Code section 6018.3.
Nonprofit Veterans' Organization
Sales and Use Tax
If you are a nonprofit veterans' organization that makes sales of merchandise or goods, you are required to register for a seller's permit. Generally, items you sell are taxable.
This is true whether you buy the items, make them, or receive them as a donation. Items you purchase can be bought with a resale certificate if you intend to resell them. You should not purchase items for use by your group with a resale certificate; instead, you should pay tax to your supplier on these items.
When you sell American flags, if the profits are used exclusively by the organization, sales of the flags are not taxable. However, you should pay tax to your supplier when you purchase flags or materials used to make them.
When you sell “Buddy Poppies” or similar symbolic, temporary lapel pins, the purchase and sale of the items are not taxable when both of the following conditions are met:
- The pins are sold or purchased by the Veterans of Foreign Wars or other specified organizations.
- The pins memorialize U.S. military veterans killed in foreign wars.
Tax does not apply to your sales of meals and food products when all of the following conditions are met:
- You sell the food or meals at a social or other gathering you conduct.
- You furnish the meals or food to raise funds for your organization's functions and activities.
- You use the proceeds to carry out those functions and activities.
Note: If you sell carbonated and alcoholic beverages included in a single price of a meal, those items are not taxable. If you sell carbonated or alcoholic beverages for a separate price, those items are taxable.
You should report all your sales on the sales and use tax return. You may claim a deduction for sales not taxable under “Other deductions” and provide a clear explanation (for example, flag sales by nonprofit veterans' organization).
For more information, please see publication 18, Nonprofit Organizations.
Sales Made on State-Designated Fairgrounds
Effective July 1, 2018, if you are a retailer who makes sales of tangible personal property that take place on the real property of a California state-designated fair (“state-designated fairground”), you must separately state the amount of those sales on your Sales and Use Tax return. Sales that take place on state-designated fairgrounds include over-the-counter sales on the fairgrounds and also may include sales in which the property is shipped or delivered to or from the fairground.
The separately reported amount will be used for funding allocation purposes only. There is no additional tax or fee due on these sales. For more information on the new reporting requirement, please see Tax Guide for Reporting Requirements on State-Designated Fairgrounds.
Property owned by a Nonprofit Veterans' Organization chartered by the Congress of the United States may be eligible for a property tax exemption (Veterans' Organization Exemption). Property owned by a qualified organization is not subject to property tax when used by the organization for charitable purposes only, and when the profit earned is not used to benefit a private individual or member of the organization.
For more information, please see our Property Tax Payment & Relief – Welfare or Veterans' Organization Exemptions - FAQs, Revenue and Taxation Code sections 215 and 215.1, and the county assessor where the property is located.
If you have additional questions regarding sales and use tax exemptions, please call our Customer Service Center at 1-800-400-7115 (TTY 711). Representatives are available Monday through Friday, (except state holidays), from 8:00 a.m. to 5:00 p.m. (Pacific Time).
If you have additional questions regarding property tax exemptions, please call the CDTFA's County-Assessed Properties Division at 1-916-274-3350 or contact your county assessor.