Sales and use tax rates in California are scheduled to decrease by 1% effective July 1, 2011. If your business charges sales tax, you should already have received a notice of this change from the State Board of Equalization.
Make sure that you and your staff are aware of the new rate for your local area. This change returns the temporary sales tax rate to the level of that before April 2009. Most of San Diego County drops down from 8.75% to 7.75%, however local municipalities such as Vista, for example, will continue to charge their additional voter-approved district taxes, half percent in the case of Vista. (In the case of Vista, the local and state rate is currently 9.25% through June 30, 2011 but then drops to 8.25% on July 1, still higher than the surrounding communities but 1% lower as reflected in this across the board statewide reduction).
Remember the date of the sale of an item is when the customer takes possession of an item, not when payment is received. If you incorrectly collect sales tax at the older, higher rate on or after July 1, 2011, you must return the excess tax collected to your customer or remit it to the state as excess tax reimbursement. If a customer purchases merchandise before the change date but returns it on or after that date for a refund, you should refund the tax based on the rate in effect at the time of sale, or the older amount that you initially collected from the customer.
As a consumer, you will of course be paying out less in sales tax for a purchase, so there is a small 1% incentive for waiting until the effective date. Meanwhile, prepare for this change scheduled for Friday, July 1 and enjoy your July Fourth holiday weekend.
Make sure that you and your staff are aware of the new rate for your local area. This change returns the temporary sales tax rate to the level of that before April 2009. Most of San Diego County drops down from 8.75% to 7.75%, however local municipalities such as Vista, for example, will continue to charge their additional voter-approved district taxes, half percent in the case of Vista. (In the case of Vista, the local and state rate is currently 9.25% through June 30, 2011 but then drops to 8.25% on July 1, still higher than the surrounding communities but 1% lower as reflected in this across the board statewide reduction).
Remember the date of the sale of an item is when the customer takes possession of an item, not when payment is received. If you incorrectly collect sales tax at the older, higher rate on or after July 1, 2011, you must return the excess tax collected to your customer or remit it to the state as excess tax reimbursement. If a customer purchases merchandise before the change date but returns it on or after that date for a refund, you should refund the tax based on the rate in effect at the time of sale, or the older amount that you initially collected from the customer.
As a consumer, you will of course be paying out less in sales tax for a purchase, so there is a small 1% incentive for waiting until the effective date. Meanwhile, prepare for this change scheduled for Friday, July 1 and enjoy your July Fourth holiday weekend.
RSS Feed
