Please Note: This article is provided for information purposes only. Please consult your tax expert to ensure compliance with all state tax regulations.
PLEASE NOTE: For new clients that onboarded Treez after 2022 and imported existing inventory from a previous POS, the invoice excise tax in Treez may not reflect the accurate historical excise tax on inventory purchased before 2023 unless this was included in the inventory import when working with the Treez implementation specialist.
Question:
How do I ensure I am not paying double excise tax with the new CA tax law?
Answer:
You can claim a credit on your return for any excise tax paid to a distributor before Jan 1, for products sold after Jan 1, 2023.
Please familiarize yourself with the guidance from CDTFA: https://www.youtube.com/watch?v=xer0BBH8ZTE
Treez can help you calculate how much excise tax credit can be claimed based on inventory purchased with excise tax paid to distributors prior to 2023 and sold in 2023:
Navigate to Reports > Sales > Tax (use the date filter for the tax reporting period)
Select the 3 dots to CSV Export
Open the export and filter the sheet
Filter the column titled 'Invoice Accepted Date' and unselect any year after 2022 (see screenshot)
Use the column titled "Total Excise Tax" (last column) to see the total excise tax credit amount for the quantity sold on that ticket line.
Please Note: You can create a pivot table for the sum of excise paid by Distributor for a more granular view if you wish.
Since this process takes into account the original invoice excise tax, it works for all CA retailers regardless of how excise tax was configured to calculate at the POS.