California restaurant sales-tax audits can create substantial exposure when a restaurant does not maintain detailed records. A recent California Office of Tax Appeals opinion, MPAAKINC, dba Anandabhavan Biryamhut, 2026-OTA-369, illustrates several recurring audit risks for restaurants: unreported taxable sales, the California 80-80 rule, sales of cold food, and the consequences of incomplete books and records.

OTA’s July 2026 business tax opinion list identifies MPAAKINC as a nonprecedential decision involving unreported taxable sales, the restaurant 80-80 rule, sales of cold food, Revenue and Taxation Code section 6359, Regulation 1603, and the submission of hallucinated or fictitious citations.

For restaurant owners, operators, bookkeepers, and investors, the larger issue is straightforward: once records are incomplete, CDTFA may reconstruct taxable sales using indirect methods. That can leave the taxpayer defending against an assessment built from bank records, federal gross receipts, markups, observation tests, point-of-sale summaries, or other available data rather than the taxpayer’s own reliable books.

New York sales tax compliance remains a significant issue for multistate sellers, online retailers, marketplace participants, service providers, contractors, restaurants, and businesses with customers in New York. A recent New York Department of Taxation and Finance update to its sales tax guidance is a useful reminder that taxability in New York is category-specific and documentation-dependent.

The Department’s Quick Reference Guide for Taxable and Exempt Property and Services explains that sales of tangible personal property are generally subject to New York sales tax unless specifically exempt, while sales of services are generally exempt unless specifically taxable. That distinction sounds simple, but it can become complicated quickly when a business sells mixed products, software, subscriptions, digital services, repairs, maintenance, installation, food, rentals, admissions, hotel occupancy, or other taxable and exempt items.

For businesses selling into New York, the risk is not limited to whether tax was collected. The business must also be able to prove why tax was not collected when a sale was treated as exempt.

Illinois sales tax compliance continues to become more complex for remote sellers, marketplace facilitators, and multistate businesses. The Illinois Department of Revenue has posted its Sales Tax Rate Change Summary effective July 1, 2026, and the Department specifically reminds businesses to adjust cash registers and computer systems to collect the correct tax.

For businesses that sell into Illinois, this is not merely an accounting update. Local sales tax rate changes, destination-based sourcing, marketplace rules, and remote-seller thresholds can create audit exposure, customer issues, amended return problems, and penalty risk if systems are not updated correctly.

Businesses selling into Texas should review their sales tax systems before the July 1, 2026 local rate changes take effect. The Texas Comptroller has posted local sales and use tax updates effective July 1, 2026, including city-level changes for Weston and Taft, new special purpose district taxes, combined area changes, and city annexation and disannexation updates.

For multistate sellers, online retailers, restaurants, contractors, wholesalers, software providers, marketplace sellers, and businesses with Texas customers, even small local rate changes can create compliance problems if tax systems are not updated on time.

Business owners, officers, managers, investors, and financial personnel often assume that a corporation or limited liability company protects them from business tax debts. In many situations, limited liability is an important protection. But California sales and use tax is different.

The California Office of Tax Appeals’ June 2026 business tax opinions include V. Moody, 2026-OTA-300, a nonprecedential opinion involving responsible person liability under Revenue and Taxation Code section 6829. OTA’s listing identifies the issue as “Responsible person liability (R&TC 6829).”

For anyone connected to a business with unpaid California sales tax, the issue is serious. CDTFA may attempt to collect the entity’s unpaid sales and use tax from an individual if the statutory requirements are met.