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Food trucks are a great way to provide cost-effective, innovative food to your community. But just because food trucks are smaller than restaurants, doesn’t mean there’s less logistics to think about. Read on to learn about food truck sales tax in California, so you can stay compliant with California tax laws.  

Do you need to pay food truck sales tax in California? 

Yes. Food trucks in California are required to pay sales tax, even on cash purchases.

That means that as a food truck owner, you will need to calculate the state and local sales tax rate, charge sales tax on every purchase, set that sales tax money aside, and then file and pay the sales tax owed when it’s due. 

If that sounds overwhelming, don’t worry. DAVO can connect with your POS system to automatically collect, set aside, file, and pay sales tax. Keep reading to learn about how it works. 

You may decide to include sales tax in your menu prices, or add it on at the time of purchase. Either way, keep in mind that you cannot overcharge for sales tax, and that you are ultimately responsible for paying the state the correct sales tax amount. 

What is the sales tax rate in California for food trucks? 

Sales tax in California depends on your specific location. The sales tax includes the state tax rate, the local tax rate, and a district tax rate. Luckily, the California Department of Tax and Fee Administration has a handy tool where you can enter your address and to get your tax rate. 

Keep in mind that you may need to charge different sales tax amounts if you operate in different locations. Use this tool to enter the address of every location you will operate out of to be sure of the correct tax rate. 

Are there exceptions to food truck sales tax in California? 

Food trucks in California are required to collect and pay sales tax on every purchase. 

The only exception to this rule is if a tax exempt organization is paying for your meals. For example, if a school or church hires you to provide food for an event and pays for all of that food, you don’t have to charge sales tax. Make sure that the organization provides you with their “Tax Exempt Certificate”, and you keep that document on file. 

Note that if a tax exempt organization hires you for an event but each customer pays for their own food, then you still need to charge sales tax for those meals since the tax exempt organization isn’t paying for those meals. 

What happens if you don’t pay sales tax for your California food truck?

It is illegal not to pay sales tax, or to underpay on your sales tax. If you don’t pay your sales tax, you can incur penalties, and even jail time. 

As a food truck owner, there are a lot of expenses you need to keep track of, and it isn’t always easy to keep up to date with your sales tax obligation. But it’s important to remember that not paying sales tax is a lot more expensive in the long run. 

But what really happens if you don’t pay your sales tax in California? 

California has pretty severe penalties for not filing or paying sales tax on time, or not paying the right amount. The maximum penalty can be up to 25% of the sales tax owed. If you want to know more about what penalties there are, you can go visit the State of California Franchise Tax Board

If you ignore past due sales tax, the state can seize your assets – like your food truck – and auction them off to the debt. In extreme cases you could even face jail time. 

Failing to pay sales tax is a personal liability, meaning you’ll still be on the hook for all penalties until you pay your sales tax, even if you close your business.

Not paying your food truck sales tax can have dire consequences. DAVO can help ensure that never happens. 

Automate food truck sales tax in California with DAVO 

As a small business owner, your time is in short supply. DAVO can take sales tax off your plate by automating the collection, filing, and payment of your food truck sales tax in California. 

When you connect DAVO with your POS system, DAVO will collect sales tax with every purchase and set aside the sales tax amount at the end of each day. That way, you don’t have to worry about accidentally spending your sales tax money.

When it comes time to pay sales tax, DAVO will file and pay your sales tax on time and in full.  

Want to take food truck sales tax off of your plate? Try DAVO today and use the time you would be spending on sales tax to grow your food truck business.