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.

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.

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.

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.

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.

Example 1:

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.

Example 2:

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.

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)

Example:

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.

Example:

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.

Services related to the sale of tangible personal property, such as food, flowers, bar service fees, and mandatory coordinator fees, are generally taxable.

Example 1:

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.

Example 2:

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.