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California sales-tax Grinch: tax on gift-wrapping
By Kay Bell • Bankrate.com
Californians doing some last-minute holiday
shopping this weekend should put a few extra bucks in their wallets
if they're planning on having gifts wrapped at the store.
The California Board of Equalization has reminded
state businesses that most gift-wrapping is taxable. That means
the state's 6 percent sales tax applies to wrapping charges regardless
of whether a firm is solely in the business of wrapping gifts or
offers gift-wrapping as a service to customers when they purchase
products.
State tax officials note that the tax must be
collected on the entire gift-wrapping cost -- labor as well as materials.
It also doesn't matter whether the gift-wrapping is done by the
store owner, employees or contracted out to a third party.
And don't think that because the wrapping is
a temporary option the tax can go uncharged. The Board of Equalization
says sales tax must be collected even if a business only offers
gift-wrapping services during the holidays.
To help businesses know just when they must
collect the state's 6 percent sales tax on gift-wrapping, the tax
board recommends they check its gift-wrapping
tax guidelines.
But what's a Christmas Eve shopper on a tight
budget but wanting to make a great impression to do? Think edible.
Most food items can be gift wrapped tax free,
meaning baskets overflowing with delectable Golden State agricultural
products are a good gift choice. So go crazy with the navel oranges,
avocados, figs, dates and fruit juices and have a happy, filling
and sales-tax-free holiday!
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