Legal Question in Real Estate Law in California
We have several jobs that have been completed and releases signed for product and labor provided. In error we did not charge California Sales Tax on the invoices. The state has audited us and we do not have a resale certificate from the contractor. We are attempting to collect the sales tax owed from the contractor. He claims that that the signed releases close the matter and he does not owe us state sales tax.
1 Answer from Attorneys
I think you are going to end up stuck with the tax cost. The Board of Equalization could theoretically collect the tax from the end user, as a use tax, and whether that is the contractor you dealt with or some property owner where the product was installed, I can't tell, but the BOE is more likely to go after you. Whether the signed releases cut off your right to collect the unbilled tax at this point depends upon how they are worded, but rather likely do close out the matter as far as sales taxes.
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