Tax Guide for Venue Rental Businesses (Español)
Helping your business succeed is part of the mission of the California Department of Tax and Fee Administration (CDTFA). Taxes you collect and pay help fund state and local services and programs important to you and your community. We recognize that understanding tax issues related to your venue rental business can be time consuming and complicated. We want to help you get the information you need so you can focus on starting and growing your business.
To help you better understand the tax obligations specific to venue rentals, we have created this guide detailing the tax issues and information important to your business.
How to Use this Guide
Each section of this guide provides information relevant to your business.
The Getting Started section provides key resources related to registration, account maintenance, filing and payments, and recordkeeping practices.
The Industry Topics section covers many topics, each in an at-a-glance format that can be expanded to provide more extensive information.
Lastly, the Resources section provides links to a wealth of information, including forms and publications, current updates, and other helpful resources.
Please note the general information provided in this Tax Guide does not supersede any law or regulation. This guide summarizes the law and applicable regulations in effect when it was published. However, changes in the law or regulations may have occurred. If there is a conflict between this document and current law, the current law governs.
Get it in Writing
Tax and fee laws can be complex and difficult to understand. If you have specific questions regarding how tax applies to your venue rental business, we recommend that you get answers in writing from us. This will enable us to give you the best advice and may protect you from owing tax, interest, or penalties should we give you erroneous advice. Such protection is not provided for advice given to you verbally, in person, or on the telephone.
For more details, please see publication 8, Get It in Writing.
If You Need Help
If you need assistance with the topics included in this guide, feel free to contact us by email or telephone at 1-(800)-400-7115 (CRS:711). Customer service representatives are available Monday through Friday from 7:30 a.m. to 5:00 p.m. (Pacific time), except state holidays.
Free Educational Consultations
Now that you have your new business up and running, you are now faced with the challenge of interpreting and complying with the complex and changing sales and use tax laws.
As part of our commitment to helping you understand your sales and use tax obligations, we have established the Taxpayer Educational Consultation Program. This free program provides eligible businesses with education and assistance and helps them prepare for their sales and use tax reporting requirements.
If you have suggestions for improving this guide, please contact us via email.
If you own a venue rental business in California and you expect to sell items that can be seen, weighed, measured, felt, or touched (tangible personal property), you must register with the California Department of Tax and Fee Administration (CDTFA) for a seller's permit. You must also file regular sales and use tax returns. Whether you are starting a new business or growing your venue rental business, you will find this information helpful in maintaining your account with us.
Online Registration – Register with us online for your seller's permit or to add a business location to an existing account.
Filing, Payments and Account Maintenance
- Tax Return Filing Deadlines – Find your filing due dates.
- File a Tax Return Online – File online! Our filing service is easy, fast, and free!
- Online Payment Options – Make payments online for tax and fee programs.
- Taxpayer Online Service Portal – Update your account information by logging in to our online services system.
If you hold a California seller's permit or any other CDTFA license or permit, you are required to maintain business records to show that you have properly paid the tax or fee.
Maintaining accurate books and records will help you keep track of your sales and purchases. Accurate books and records will also assist you when preparing your sales and use tax returns. You are required to keep records for at least four (4) years, unless directed by us to keep them for a longer period. Not maintaining records may be considered evidence of negligence or be perceived as an intent to evade the taxes. This may result in penalties.
Your records should be complete so our representatives may:
- Verify the accuracy of your tax returns; and
- Determine if you have correctly paid the tax due on your sales and purchases.
Records you should keep include, but are not limited to:
- Cash register tapes and receipts
- Purchase invoices
- Sales invoices
- Shipping documents
- Resale certificates
- Tax returns and supporting documents
For more information on recordkeeping, please see publication 116, Sales and Use Tax Records.
In California, all sales of tangible personal property are taxable unless the law provides a specific exemption or exclusion. The law defines tangible personal property as an item that can be seen, weighed, measured, felt or touched.
As a venue rental business, services you perform in connection with the sales of tangible personal property may be subject to sales tax.
Use tax is a companion to California's sales tax, and is due whenever you purchase taxable items without payment of California sales tax from an out-of-state vendor for use in California. You also owe use tax on items that you remove from your inventory for use in California when you did not pay tax at the time of purchase. For example, if you issued a resale certificate to purchase carbonated beverages but took any of them out of inventory for personal consumption or gave any away, you owe use tax based on the purchase price of the soda you removed from your inventory.
To pay use tax, report the purchase price of the taxable items under "Purchases Subject to Use Tax" on your sales and use tax return. Those purchases become part of the total amount that is subject to tax.
Most people who sell taxable items or perform taxable labor in California, even temporarily, must register with the CDTFA for a seller's permit.
Registering for a seller's permit is free, although in some cases a security deposit may be required.
If your business has more than one location that participates in taxable transactions, you must register each location with us.
You can register with us for a seller's permit or consolidated seller's permit (that is, a permit that includes sub-permits issued for each location) using our Taxpayer Online Service Portal.
Be sure to let us know about any changes to your business, or to your mailing or email address so we can keep your records updated and inform you of important changes in law, tax rates, or procedure. You can easily update your account information by creating an online account in our online services with a username and password, contacting our Customer Service Center or any one of our field offices throughout the state. Contact information is available in the Resources section of this guide.
The current statewide base sales and use tax rate is 7.25 percent. However, the total sales and use tax rates are higher in areas where district taxes are imposed.
District taxes are voter-approved taxes imposed by cities, counties, and other local jurisdictions. District taxes are added to the statewide base rate. If you are a retailer, you are responsible for reporting your retail sales and paying the tax to us at the proper rate. If you make retail sales in California from a business located in a taxing district, you are generally responsible for the district sales tax. You are also responsible for collecting, reporting, and paying the district use tax when making sales for delivery into taxing districts in which you are considered "engaged in business in the district."
Generally, you are "engaged in business in a district" when you meet one of the following conditions:
- Have a permanent or temporary business location in the district, including a warehouse, salesroom, or office,
- Have a representative or agent in the district, even temporarily, who, for example, makes sales, takes orders, or makes deliveries for you,
- Receive rental income from the lease of merchandise located in the district, or
- Make annual sales of tangible personal property in California, or for delivery in California exceeding $500,000.*
* On and after April 25, 2019, a retailer is considered engaged in business in every district that imposes a district tax if, in the preceding or current calendar year, their total combined sales of tangible personal property in this state or for delivery in this state exceed $500,000. As such, all retailers meeting this threshold are responsible for collecting and paying any district tax on taxable sales made for delivery in any district that imposes a district tax.
For more information on being engaged in business in a district, please see publication 44, District Taxes (Sales and Use Taxes) or our Local and District Tax Guide for Retailers. Current and historical district tax rates may be found on our California City & County Sales & Use Tax Rates webpage.
You can look up tax rates by city and county or find the full tax rate in your city or county by going to the Find a Sales and Use Tax Rate webpage and entering the address as prompted.
Key Industry Topics
The information provided below includes common industry topics for venue rental businesses. If you are a business that rents venue space, your charge for the venue rental, related sales of tangible personal property, rentals of tangible personal property, and services, may be taxable.
Venue Rentals Only
A rental of premises for an event, without any sale or lease of tangible personal property, is a rental of real property and tax does not apply to your rental fee.
Sales and use tax is imposed on the sale or lease of tangible personal property. Items sold or leased with a venue rental are generally taxable.
Retail sales of tangible personal property, for example, flowers or vases, are subject to tax measured by gross receipts, unless specifically exempt.
As a venue rental business, you may also lease tangible personal property. A lease includes any rental, hire, license. Commonly leased items by venue rental businesses include chairs, linens, tables, etc. Your lease of such items with a venue rental may be taxable. How tax applies depends on whether or not you paid tax at time you purchased the item or placed the items into your rental inventory. No tax is due on your lease receipts if the items are leased in substantially the same form as you acquired them, and you paid tax, either to your vendor or by timely reporting and paying use tax measured by the purchase price of the property.
You operate a venue rental business. You will supply the chairs, tables, and linens for your customer's use at the event. Upon purchase of these items, you paid tax on the purchase price directly to your vendor. Therefore, your charge for the rental of these items is not subject to tax.
Assume the same facts given in Example 1. Your customer requests special lighting effects for their event. You did not pay tax on the purchase price of the lighting equipment directly to your vendor and did not timely elect to report and pay use tax measured by your purchase price. The charge for the rental of the lighting equipment is taxable lease receipt. You must collect, report, and pay tax based on your charge for the lighting equipment rental.
For more information on when tax applies to leases of tangible personal property, see publication 46, Leasing of Tangible Personal Property.
With a rental of premises for an event in which the primary purpose is serving food and beverages, furnished by you, the rental fee is subject to tax, even if you separately state the food and beverage charges.
This is true whether real property is regularly used for serving meals and beverages (such as restaurants, hotels, and similar establishments) or not (such as wineries, museums, country clubs)
You operate a golf course with an outdoor courtyard which is not regularly used as a space where food and drinks are served. You contract with a customer who rents the courtyard for a wedding reception and you provide a third-party caterer to furnish the food and beverages. Since the primary purpose of the event is to serve food and beverages, you are considered to be functioning as a restaurant. The entire charge is taxable, regardless of whether it is a lump sum price or the caterer's charge is separately stated.
However, if you contract to provide and serve food/beverages at your venue, but also rent a separate area to your customer for a use other than serving food/beverages, the charge for the use of the separate area unrelated to serving of food/beverages is not subject to tax if the charge is separately stated on the invoice. In the example above, a separately stated charge for a different area of the golf course where the bride and groom prepare for the reception would not be subject to tax.
For more information, see publication 22, Dining and Beverage Industry.
When you provide a venue rental and your customer separately hires a third-party catering company to provide food and beverages, you do not owe tax on your venue rental charge because you are not the retailer of food and beverages. Generally, your venue rental is a nontaxable rental of real property.
A customer wants to rent your warehouse for a birthday event. Your customer will contract with a food vendor to cater food and beverages. Since your contract with your customer only involves the rental of the warehouse and does not involve the furnishing of food and beverages, you are not the retailer of food and beverages. The food vender will be responsible for the tax for the catering of food and beverages.
However, any charges you make to your customers for preparing or serving food or beverages that they provide are taxable. For example, tax applies to any charges you make for cutting and serving a wedding cake or opening and serving customer-furnished wine.
For more information, see publication 22, Dining and Beverage Industry.
In addition to your venue rental, you may also provide services. How tax applies to your service charges depends on whether the services are related to the sale of tangible personal property.
Services related to the sale of tangible personal property, such as food, flowers, bar service fees, and mandatory coordinator fees, are generally taxable.
You rent a venue to your customer which includes an all-inclusive package for the venue that includes food and beverages, flower arrangements, bar service fees, and mandatory coordinating fees. The sale of tangible personal property including catered food and beverages and flower arrangements and bar services fees, and mandatory coordinator fees related to the sale of tangible personal property to your customer are taxable.
However, services not related to the sale of tangible personal property, such as DJ services and security services, are generally not taxable when a separate statement between taxable and nontaxable charges are made on a sales receipt, invoice, or contract, and your books and records support the nontaxable charges.
Assume the same facts given in Example 1. However, your customer requests that you also provide DJ services and security services. Since the charges for these services do not relate to the sale of tangible personal property, and are separately stated on the sales invoice, these charges are not subject to tax.
For more information, see publication 22, Dining and Beverage Industry.
- Publication 22, Dining and Beverage Industry
- Publication 44, District Taxes (Sales and Use Taxes)
- Publication 46, Leasing Tangible Personal Property
- Publication 110, California Use Tax Basics
- Publication 116, Sales and Use Tax Records
- Regulation 1501, Service Enterprises Generally
- Regulation 1603, Taxable Sales of Food Products
- Regulation 1660, Leases of Tangible Personal Property—in General
Other Helpful Resources
- CDTFA Online Services – You can learn about the online services CDTFA offers, including online registration for seller's permits and other accounts.
- CDTFA Offices – This comprehensive listing of all CDTFA offices makes it easy to find a local office near you.
- City and County Tax Rates – You will find a listing of current and historical tax rates.
- Contact Us – This page shows the various ways you may reach us to resolve your questions and concerns.
- Find Your Tax Rate – You can look up the current sales and use tax rate for a specific address.
- Get It in Writing – The Sales and Use Tax Law can be complex, and you are encouraged to put your tax questions in writing.
- News Releases – Our News Releases cover a broad range of topics, including updates to tax laws and to resources for taxpayers.
- Special Notices – Special Notices offer taxpayers guidance regarding law and policy changes, significant news, program updates, and other important information.
- Sign Up for CDTFA Updates – We send a monthly email detailing important business information, including Special Notices, Tax Information Bulletins, and updates for local services; sign up now to stay informed.
- Taxpayers' Rights Advocate (TRA) – If you are unable to resolve any tax issues with the CDTFA or if you would like more information regarding your rights, you can contact the Taxpayers' Rights Advocate Office.
- Verify a Permit or License – This page allows you to search a permit or license to verify a seller's permit, cigarette and tobacco products retailer's license, eWaste account, or underground storage tank maintenance fee account.
- Videos and How-To Guides – These resources will help you avoid common mistakes, file your tax returns online, and more.
- Local and District Tax Guide for Retailers – A tax guide for retailers to learn more about how to property collect, report, and pay local and district taxes.