California Tax Appeals Office Adjusts Tip Ratio in Taxpayer’s Petition for Redetermination

The California Office of Tax Appeals issued a decision partially granting taxpayer’s petition for redetermination of additional tax, interest, and a negligence penalty for the period July 1, 2016, through Dec. 31, 2018. The California Department of Tax and Fee Administration (CDTFA) disallowed taxpayer’s claimed exempt food sales and used a credit card sales ratio analysis to estimate additional taxable sales. The Office of Tax Appeals held that while CDTFA’s use of the credit card sales ratio method was reasonable the credit card tip ratio used in the calculation should be adjusted from 2.68 percent to 4.4 percent based on ...