Publication 36, Veterinarians
Reporting Sales Tax
The retail sale of goods in California is generally subject to sales tax. This page describes sales tax reporting, including information on credit sales. For more information, you may wish to obtain a copy of publication 73, Your California Seller's Permit. Please refer to the Additional Information page for information and the complete list of regulations and publications referenced in this publication.
Sales tax reimbursement (including an amount for sales tax in your charges)
Although you are responsible to report and pay sales tax to us, the law allows you to collect “reimbursement” from your customers for the sales tax you will owe on each retail sale. You may add the amount of tax due to the price of the products you sell, being sure to itemize the tax on your invoice or receipts, or you may include it in the price for the product. If you choose the latter method, you must post a visible sign stating, “All prices of taxable items include sales tax reimbursement calculated to the nearest mill,” or include a similar statement on your sales receipts.
Tax due with your sales and use tax return
You must report all of your sales on your sales and use tax return—including nontaxable sales, nontaxable charges for professional services, and nontaxable boarding charges. The tax due with each return is based on your total gross sales for the period less deductions for nontaxable receipts and other adjustments. (Some exemptions and deductions common to veterinary practices are described in Exemptions and Deductions.)
Reporting credit sales
Tax for an item sold on credit is due with the tax return for the reporting period in which you make the sale, even though you may not receive full payment until a later date. Tax is due on the full selling price.
Example: You perform surgery on a horse in March and keep the animal at your clinic for two days for observation. On your bill, you separately state a $50 charge for the horse’s feed (as explained in Professional services and boarding charges, when related to professional services and listed as a separate charge, the sale of feed is generally considered a taxable retail sale). Your client pays you $25, and agrees to pay the balance in future months. Regardless of when you receive the balance due, the $50 selling price of the feed must be included on your tax return for the reporting period that includes the month of March.
You may exclude amounts for insurance, interest, finance, and carrying charges from the taxable selling price you report for a credit sale, provided you keep adequate and complete records itemizing those charges.
If you have reported tax on a transaction and do not receive payment from your customer, you may be able to claim a bad debt deduction on your sales and use tax return (see Bad debt deductions).
Losses from robbery, theft, or shoplifting
You are required to pay tax on all of your taxable sales despite any loss of proceeds from them. As a result, you may not take a deduction for a loss due to robbery, theft, or shoplifting.
Although you cannot deduct such losses, you must document them in your records. Acceptable forms of documentation include police reports, insurance claims, reports from private investigating agencies, and so forth. It is important that you be able to account for all of your inventory and income if your practice is audited.
Revision July 2026