California Appeals Office Sustains Denial of Restaurant’s Petition for Redetermination of Sales Tax

The California Office of Tax Appeals (OTA) Nov. 8, 2019 sustained the California Department of Tax and Fee Administration’s (CDTFA) denial of Taxpayer’s petition for redetermination of its sales and use tax. Taxpayer, a restaurant owner, requested the redetermination after a CDTFA audit established that the restaurant’s actual taxable sales exceeded reported sales. Taxpayer contended that the restaurant’s credit card to total sales ratio was higher than the ratio estimated by the CDTFA. The OTA found: 1) the CDTFA performed six alternative audits and selected the methodology that produced the lowest liability for Taxpayer; and 2) Taxpayer provided Quickbooks records ...