Sales Tax Audit of Restaurants and Bars – Construction: California Sales Tax Attorney

Californa Sales Tax BOE – Board of Equalization Tax Attorney

California Board of Equalization California Sales Tax

Sales Tax for Construction Restaurant and Bars

APPLICATION OF TAX TO RESTAURANT EQUIPMENT CONTRACTORS

The Board of Equalization, in conjunction with the Restaurant Equipment Contractors Association, has made a study of components involved in lump-sum contracts for the furnishing and installing of restaurant equipment. Review Construction Sales Tax Basics Here

Application of California sales tax may differ based on type of contract you have with your contractor as well as classification of items used to construct the restaurant or bar. Sales tax amount for materials, equipments and fixtures will vary significantly and it may result in huge tax savings for either the restaurant owner or contractor depending upon classification method.

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The following are some items which are usually considered to be materials when furnished and installed by a construction contractor in performing a contract for the food industry:

Carpeting, including padding and trim when affixed to the real property by glue, nails, etc.
Doors Ducts installed in walls, ceilings, and floors Grab bars (for handicapped lavatories)
Millwork Pass window frames and shelves Wall corner pieces and wall caps Wall covering materials (wallpaper; paneling; etc.)
Wall flashing Wall mirrors
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The following items furnished and installed by contractors to the food service industry are generally classified as fixtures:

Bolt-down counter stool bases, with stools attached thereto Bolt-down table bases with table tops affixed Custom fabricated cash stands Custom fabricated cocktail back bar superstructures Custom fabricated cocktail back bar Custom fabricated cocktail bars Custom fabricated counters Custom fabricated dishtable assemblies Custom fabricated make-up tables Custom fabricated pot racks Custom fabricated scullery sink assemblies Custom fabricated seating assemblies/booth units Custom fabricated serving counters Custom fabricated service stands Custom fabricated soffits Custom fabricated walk-in coolers and freezers that are affixed to the real estate Dispensers for soap, towels, toilet tissue Faucets Freezers
Hoods Lighting fixtures Motors Plumbing fixtures Refrigeration compressors Refrigerators
Safes, imbedded in concrete in the buildings Water heaters (built into fixtures or into water systems)
Water softeners (built into fixtures or into water systems)

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Fixtures also include the following items which are built into fixtures or otherwise built into the realty and which may not be removed without damage to the items or the realty:

Char-broilers Dish dispensers Dishwashers that are built into a dishtable Disposals Drink dispensers Freezers Griddles Ice cream cabinets Ovens Refrigerators Roll warmer Scrap chutes Soda fountain systems Soup warmers Syrup rails

The following is a list of items which may be generally considered to be machinery and equipment when freestanding or when they are not firmly affixed to the building or built into it or another fixture and which may be readily removed without damage to the building, the unit, or other fixture:

Adding machines Artifacts items Bar stools Beverage and juice dispensers Bulletin boards Can openers Chairs Char-broilers Chinaware, silverware, pots and pans, paper goods, culinary items Coffee makers File cabinets Flight-type dishwashers Floor racks Griddles Hot water hoses Ice bins Ice cream cabinets Ice making machinery Iced tea dispensers Iced tea machine Lockers Microwave ovens (freestanding)
Milk dispensers Mixers Ovens Portable bins and tables Ranges Reach-in freezers (self-contained)
Reach-in refrigerators (self-contained)
Roll covers Safes Salamanders Scales Shelving units Silverware boxes Slicers Table lamps Tables Time car racks Time clocks Toasters