Contact UsWe are an event promotions company helping run successful events in CA. Occasionally we purchase items (Bluetooth speakers), which we pay sales tax on, to give away as part of our services. We do not charge sales tax and consider everything a service. Is this correct?
Should we be purchasing items such as this on a Resales License then charging our clients sales tax?
Could we be liable for taxes on these items if audited?
State of California.
Could we be liable for taxes on these items if audited?
State of California.
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Tax Professional Answers
William Rogers, CFP, MBA, EA
No, you should not be charging your customer's tax. As an event promotions company the speakers, lighting equipment, and other supplies that you purchase for use in your business are considered items consumed by you, not the customer. Therefore, you should be paying the sales tax upon purchase of the equipment. Your charges to your customers would be considered as professional services.
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359 weeks ago