California CDTFA Issues Sales and Use Tax Informational Letter Regarding Businesses Adding Surcharges

The California Department of Tax and Fee Administration (CDTFA) Aug. 1 issued an information letter regarding the application of sales and use tax to surcharges. The CDTFA provides that: 1) retailers owe tax based upon their gross receipts from retail sales; 2) gross receipts include all amounts received with respect to a sale, with no deduction for the cost of the materials, service, or expense of the retailer passed on to a purchaser, unless there is a specific statutory exclusion; 3) tax also applies to the surcharge amount, when retailers separately add a surcharge to their taxable sales; and 4) ...