What is taxable?
• Bonuses. • Compensation paid in property or the use thereof at fair market value to the same extent as taxable for federal tax purposes and so indicated on the W-2 form. • Contributions made by or on behalf of employees to a qualified deferral plan (401K and the like) – taxed at year earned, deferral not permitted. Exception: employer matching contributions offered under a cafeteria plan are not taxable. Deferrals even under a cafeteria plan are always taxable. • Contributions made by or on behalf of employees to a tax-deferred annuity or stock purchase plan (includes any plan where employee has the option to defer). • Contributions made by or on behalf of employees to a non-qualified deferred compensation plan. • Cost of group term life insurance over $50,000.00 (unless part of a cafeteria plan). • Director’s fees. • Short-term disability pay if received as a benefit from employment (includes third party plan) prior to 6/30/2007. • Adoption assistance payments (unless part of a cafe
Retail sales of tangible personal property in California are generally subject to sales tax. Examples of tangible personal property include such items as furniture, giftware, toys, antiques, clothing, and so forth. In addition, some service and labor costs are subject to sales tax if they result in the creation of tangible personal property. In some instances, retailers must pay use tax, rather than sales tax, to the Board. The most common example of a purchase subject to the use tax is a purchase of an item for use in California from an out-of-state retailer. Out-of-state retailers who are engaged in business in this state are required to collect the use tax, whenever applicable, from the consumer at the time of making the sale. The tax rate for sales and use taxes is the same. Some sales and purchases are exempt from sales and use tax. Examples of exempt sales include, but not limited to, sales of certain food products for human consumption, sales to the U.S. Government, and sales of
