Medical & Dental Practices Bookkeeping in California

Employer registration in California runs through the California Employment Development Department (EDD), a different agency from the California Department of Tax and Fee Administration (CDTFA) that handles your sales tax — a separate account number, a separate login, and separate deadlines. Businesses routinely register for one and forget the other, then discover the gap when a notice arrives.

Registering to do business in California runs through the California Secretary of State, with tax accounts through the California Department of Tax and Fee Administration (CDTFA) and employer accounts through the California Employment Development Department (EDD). California treats these as wholly independent, so being in good standing with one says nothing about the others — and the sales tax account is the one that accrues a real balance while you are not looking.

Beyond sales tax, California entities have their own obligations — registration with the California Secretary of State, and whatever annual entity-level tax or report the state imposes. Highest statewide base rate in the country, and district taxes stack on top. LLCs also owe the $800 annual franchise tax to the Franchise Tax Board regardless of income. These are recorded as they accrue rather than discovered at year end.

Whether medical & dental practices services are taxable in California is the question that catches people out — states differ enormously, and several have been broadening what counts. Highest statewide base rate in the country, and district taxes stack on top. LLCs also owe the $800 annual franchise tax to the Franchise Tax Board regardless of income. We code service revenue separately from any product revenue so the treatment is explicit rather than assumed.