California Sales Tax for Veterinarians - Tax-paid Purchases Resold

If you pay an amount for sales or use tax on the purchase of an item and then resell the item before using it, you can take a deduction on your tax return.


When you report the sale, you may deduct your cost for the item, not including any applicable tax, under Cost of Tax-Paid Purchases Resold Prior to Use.

If you do not take the deduction, you may pay more tax than you owe.

Example

You purchase a case of prescription diet dog food for $20. Since you intend to use the dog food in a way that qualifies you as its consumer, your supplier applies tax to your purchase. Later, a customer comes into your practice with a prescription for diet dog food from another veterinarian. You sell the customer the case of dog food for $35 without providing any related professional services. The transaction is considered a retail sale. You are required to report the $35 sale on your sales and use tax return (included in your gross receipts) and to pay sales tax on the transaction. However, since sales tax was applied to your initial dog food purchase, you can take a $20 deduction (your cost, not including tax) on your return, under Cost of Tax-Paid Purchases Resold Prior to Use.

Source: California Department of Tax & Fee Administration (CDTFA)

Course: https://salestaxsolutions2000.com/california-sales-tax-veterinarians

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