California’s restaurant industry—over 70,000 establishments serving a state with more dining locations than anywhere in the U.S.—generates more than $1.1 trillion in sales nationally in 2025. The sector is a priority for CDTFA audits, with regulators focused on underreported sales, misapplied exemptions, and cash-heavy operations.
Most bars and restaurants are required by law to collect and remit sales tax on meals, hot food, and alcoholic beverages. Errors in following California’s intricate food tax rules or recordkeeping can trigger audits and major penalty risks.
We’ll analyze your sales and tax exposure, explain CDTFA’s latest tactics for the dining sector, and design your defense strategy—at zero cost.
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Meals, hot foods, and alcoholic drinks are taxable. Cold foods “to go” can be exempt—unless your sales cross the 80/80 Rule or are bundled with hot items. Always check with an expert.
Yes. CDTFA reviews all sources of revenue, including UberEats, DoorDash, and catering, and reconciles with in-house records and bank deposits.
Respond quickly—but do not answer solo. Engage audit defense experts who understand restaurant sector rules and CDTFA audit procedures.
Yes. These are often included as taxable if your documentation and menu pricing are unclear. Our team helps prevent and defend against such assessments.
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