Bookkeeping for Food Trucks in California: CDTFA Sales Tax, Commissary Permits, and Cash Reconciliation

Running a food truck or taco truck in Southeast Los Angeles means managing a set of financial and regulatory obligations that most generic small business guides never mention. You have California sales tax rules that apply differently to food sellers than to any other business type. You have a county health department that requires you to operate from a licensed commissary, which is a real cost that belongs in your books. You are running significant cash volume every service, and that cash needs to reconcile to your Square reports before the next day starts. And if a family member or helper works the truck with you, California law has specific things to say about how they need to be paid and reported. This guide covers all of it in plain terms, written specifically for food truck and taco truck operators in Downey, Compton, Lynwood, South Gate, Huntington Park, Bell, and Bell Gardens.

For a broader picture of how California sales tax applies to food sellers across different business types, see our California sales tax bookkeeping guide. For the payroll side of things, see our California payroll bookkeeping guide.

Why Food Truck Bookkeeping Is Different in California

A food truck or taco truck in California faces three financial pressures that most small business bookkeeping systems are not set up to handle out of the box: California sales tax on prepared food under the 80/80 rule, a county commissary requirement that creates a deductible operating cost many owners never track properly, and daily cash volume that can quietly become unreconciled income if the books fall behind even a week.

Sales tax on hot food. California does not tax unprepared cold food in the way it taxes most other goods. But most food trucks sell hot, prepared food with eating utensils provided, and that changes the tax picture entirely. Under CDTFA Publication 31 (Food and Sales Tax), if your operation meets the 80/80 threshold (described in detail below), essentially all of your sales become subject to California sales tax. The CDTFA requires you to register as a seller, collect sales tax from customers, and file and remit it on a quarterly basis. Many food truck operators in SE Los Angeles did not know this applied to them, or have not been collecting it consistently. Getting this right, and getting caught up if you are behind, is the first priority for any food truck bookkeeping setup.

The commissary requirement. California county health departments require food trucks to operate from a licensed commissary: a permitted commercial kitchen where food prep is done, where the truck is cleaned and restocked, and in many cases where it is stored overnight. You are paying for that access either by the hour or under a monthly agreement. That cost is a deductible business expense, and it needs to be tracked as its own line item in your books, not buried in miscellaneous. Many food truck operators are writing these checks without recording them, which means they are paying the cost twice: once in cash and once at tax time when the deduction is lost.

Cash volume and daily reconciliation. A food truck that runs weekend events in Compton, weekday lunch stops in South Gate, and private catering gigs in Huntington Park can move through significant cash in a week. Every dollar of that cash is taxable income. The problem is that cash does not leave a paper trail unless you create one. If your Square reports and your daily cash do not reconcile before the next service, the gap between what you sold and what you deposited becomes harder to explain with every passing week. By the time tax season arrives, the books may be months behind and the numbers may not match anything.

The combination of a specific sales tax rule, a deductible operating structure most owners do not have set up correctly, and a high-cash revenue model makes bookkeeping for food trucks in California a specialized task with real financial consequences for getting it wrong.

CDTFA Sales Tax and the 80/80 Rule

California's sales tax rules for food sellers are governed by the California Department of Tax and Fee Administration (CDTFA) and described in CDTFA Publication 31 (Food and Sales Tax). The general rule is that unprepared cold food sold for consumption off the premises is exempt from California sales tax. But most food trucks and taco trucks do not sell cold, unprepared food for takeaway. They sell hot food, prepared to order, with plastic utensils and napkins handed over with every plate or order. That takes them out of the exemption and into taxable territory.

The 80/80 rule explained. Under CDTFA Publication 31, if a food seller meets both of the following conditions, then even cold food items that would otherwise be exempt become taxable:

• More than 80 percent of the seller's gross receipts come from food sales (as opposed to merchandise, supplies, or non-food items), AND
• More than 80 percent of those food sales are taxable (meaning they are sales of hot food, hot beverages, or food sold with eating utensils provided by the seller)

When both conditions are met, the 80/80 rule applies and essentially all of the seller's food sales become taxable. A taco truck selling hot tacos, burritos, and quesadillas with plastic forks and napkins provided at every order will almost always meet both conditions. A food truck serving hot entrees with utensils at every stop will as well. The practical result: you are collecting California sales tax on all of your food sales (with very limited exceptions for things like packaged cold beverages sold in factory-sealed containers). Confirm your specific situation with your CPA or the CDTFA directly, as the rules have narrow exceptions and CDTFA guidance is authoritative on how they apply to your operation.

CDTFA registration and quarterly filings. If your food truck operation is subject to sales tax (which most taco trucks and hot food trucks in California are, once the 80/80 rule applies), you are required to register with the CDTFA as a seller, obtain a seller's permit, collect California sales tax from your customers, and file a sales tax return and remit the tax collected on a quarterly basis. Missing or late CDTFA filings result in penalties and interest. If you have been operating without collecting sales tax and the CDTFA determines you were required to, you may owe back taxes on prior sales. A bookkeeper familiar with food truck accounting in Los Angeles can help you quantify the exposure and get current.

Your seller permit and where you operate. A food truck that operates in multiple cities or counties needs to verify that its CDTFA seller permit covers all of the locations where it does business. CDTFA guidance on whether a sub-permit or location update is needed for specific operating areas can change; confirm directly with the CDTFA or with your CPA that your current permit covers every city where you regularly set up. Operating in Los Angeles, Compton, South Gate, and Downey under a single permit may be straightforward, but you should confirm rather than assume. For more on how California sales tax registration and filing works in practice, see our California sales tax bookkeeping guide.

Commissary Permits and Deductible Operating Costs

California county health departments require food trucks to operate from a licensed commissary. A commissary is a permitted commercial kitchen that has been inspected and approved by the county environmental health department. It is the facility where your food prep is done before service, where the truck is cleaned and sanitized, where ingredients are stored, and in many cases where the truck itself is parked overnight. Without a current commissary agreement on file, your health permit can be revoked and you cannot legally operate.

For most food truck operators in SE Los Angeles, commissary access is purchased by the hour or under a monthly flat-fee agreement. That cost is a deductible business expense under IRS rules and under California FTB rules. It belongs in your books as a distinct expense category, not lumped into rent, miscellaneous, or food costs.

How to track commissary costs correctly. Set up a dedicated expense category in QuickBooks (or whatever bookkeeping system you use) called "Commissary Fees" or "Licensed Commissary Access." Every payment you make to your commissary facility, whether a monthly invoice, a per-session charge, or an annual permit fee, goes under that category. Keep copies of your commissary agreement and every invoice. This matters for two reasons: first, it ensures the deduction is supported by documentation if the IRS or FTB ever reviews your return; second, it separates commissary cost from food cost and overhead so you can see what you are actually paying per month to maintain compliance, which affects how you price your service.

The commissary permit itself (the county health department permit that authorizes the commissary facility to operate) is typically the commissary operator's cost, not yours. But your own county mobile food facility permit (the health permit that lets you operate the truck) is absolutely your expense and is deductible. Track it separately under "Health Permits and Licenses," not mixed with commissary fees. The distinction matters when you are reviewing your books at year-end and matching expenses to deductions.

Cash and Square Reconciliation

Many food truck and taco truck operations in SE Los Angeles run a high percentage of their revenue in cash, with Square handling card transactions. That is a workable model, but it creates a specific bookkeeping obligation: every single day you operate, your Square report and your cash drawer need to reconcile against each other before the next day starts.

Here is why this matters for taxes. Every cash sale is taxable income. The IRS and the CDTFA do not make exceptions for cash. If your books show $800 in Square sales for a given Saturday but you also collected $400 in cash and only deposited $900 total, the $300 gap has to be explained. Over a year of operating without daily reconciliation, those unexplained gaps add up to the kind of discrepancy that triggers scrutiny. On the other side of the ledger, if you cannot document your deductions because your books are behind, you lose them. Both problems cost you real money.

Daily reconciliation in practice. At the end of every service, before you clean up:

• Pull your Square daily sales report. It shows total card sales, total transactions, fees deducted, and the net deposit amount.
• Count your physical cash drawer. Your starting cash (your float) plus cash sales for the day should equal what is in the drawer. Subtract the float; what remains is your cash revenue for the day.
• Add Square card revenue and cash revenue together. That is your total revenue for the day.
• Deposit consistently. Do not dip from the cash drawer for personal expenses, ingredient runs, or anything else before the count is done. The moment cash leaves the drawer for an unrecorded reason, the reconciliation breaks.
• Record both figures in your bookkeeping system the same day or the morning after at the latest. QuickBooks Online can import Square transaction data directly, which reduces manual entry and the errors that come with it.

Venmo and Zelle for food orders. If customers pay you via Venmo, Zelle, or any other peer-to-peer payment platform for food orders, those payments are taxable income and must be recorded in your books the same as cash or card sales. They are not gifts. Beginning in 2024, payment platforms began reporting transactions to the IRS at lower thresholds than before (confirm the current reporting threshold with your CPA, as it has changed in recent years). Do not assume peer-to-peer payments are invisible to the IRS; record them the same day and deposit them to your business account.

Separating personal and business funds. A dedicated business checking account for the food truck, separate from your personal account, is not optional if you want books that can be reconciled and defended. All revenue (Square deposits, Zelle transfers, cash deposits) goes into the business account. All business expenses (commissary, supplies, permits, fuel, propane, insurance) come out of the business account. When you need to pay yourself, transfer a defined amount to your personal account and record it correctly. This discipline is the single thing that makes bookkeeping manageable for food truck operators who carry high cash volume.

Vehicle, Fuel, and Equipment Deductions

The food truck itself is a business asset. Fuel for the truck, propane for the cooking equipment, repairs, and any personal vehicle you use for business purposes are all deductible. Tracking these correctly requires more than keeping receipts; it requires recording them in the right categories in your bookkeeping system.

The truck as a depreciable asset. When you purchased the truck (or financed it), you acquired a business asset. That asset depreciates over time for tax purposes, and you are entitled to claim that depreciation as a deduction. Under Section 179 of the Internal Revenue Code, you may be able to deduct the full purchase price of qualifying business equipment in the year it is placed in service, rather than spreading the deduction over several years. Confirm the current Section 179 deduction limit and eligibility rules with your CPA, as Congress adjusts these annually and California does not always conform to federal rules on depreciation. Your bookkeeper records the truck as a fixed asset in QuickBooks with the purchase date and cost, and tracks whether you elected Section 179 or standard depreciation so the records match your tax return.

Fuel for the truck and propane for cooking. Diesel or gas that fuels the truck itself is a direct business expense. Propane for your flat top, burners, or cooking equipment is also a direct business expense. These are two different expense categories in your chart of accounts: vehicle fuel is not the same as cooking fuel. Keep every receipt, record the purchase in your bookkeeping system on the day it occurs, and assign it to the correct category. Commingling fuel costs into a single line makes it harder to identify waste, negotiate better propane contracts, or answer questions if the IRS ever asks why your fuel expense seems high relative to your revenue.

Personal vehicle mileage for business purposes. If you drive your personal car or truck to scout event locations, pick up supplies, visit your commissary, or handle other food truck business, that mileage is deductible at the IRS standard business mileage rate (the IRS updates this rate annually; check IRS.gov or confirm with your CPA before filing). Commuting from home to the food truck or commissary is generally not deductible. Business-related driving is. Keep a mileage log (date, destination, business purpose, and miles driven) either in a paper notebook or with an app like MileIQ or Everlance. Without a contemporaneous log, the IRS will deny the deduction on audit.

Truck maintenance and repairs. Oil changes, tire replacements, generator service, and repairs to cooking equipment are all deductible business expenses. Keep every service receipt and record each one under an "Equipment Maintenance and Repair" category, separate from the depreciation on the truck itself. If you have repairs done at a shop, get an itemized invoice, not just a total. Itemized documentation is what holds up in a review.

Permits, Licenses, and Event Fees as Deductions

The permits and fees that keep a food truck legally operating in SE Los Angeles are significant costs, and every one of them is a deductible business expense. The problem is that many food truck operators either do not record them at all, or lump them all into a "Miscellaneous" category that tells the IRS nothing useful and gives you no visibility into what compliance is actually costing you.

Here are the specific permits and fees to track as separate line items in your chart of accounts:

• County mobile food facility health permit. Required by your county health department (Los Angeles County Department of Public Health for most operators in this area). Annual or biennial renewal fee. Track as "Health Permits."
• City business license fees. If you operate in Downey, Compton, South Gate, Lynwood, Huntington Park, Bell, or Bell Gardens, each city may require its own business license. Track each city's fee separately under "Business Licenses" rather than combining them.
• Event permit fees. Many cities and event organizers charge a permit or vendor fee to operate at a specific event or location. These are deductible. Track them under "Event Permits and Vendor Fees."
• CDTFA seller permit fees. The initial seller's permit registration with the CDTFA is currently free, but any renewal or sub-permit fees associated with your account are deductible. Keep the documentation.
• Fire department permits. Some cities require a separate fire department inspection or permit for mobile food units with cooking equipment. Deductible; track separately.

Tracking each permit separately does more than support the deduction. It also creates a compliance calendar: when you can see in your books that your LA County health permit was renewed in March 2025, you know when to expect the next renewal, which keeps you from operating on an expired permit. An expired health permit can shut down your operation at a county inspection and void your commissary agreement.

EDD Payroll If You Have a Helper or Family Member Working the Truck

Many food truck and taco truck operations in SE Los Angeles are family businesses. A spouse runs the cash register. A sibling handles the flat top. A cousin takes orders. If those family members receive any compensation for their work, California employment law applies, and the bookkeeping requirements that come with it are real.

Family members are employees under California law. A family member who works your food truck and receives pay for that work is an employee for California EDD and IRS purposes, even if they are a relative. The same is true for any regular helper who works alongside you at events. Under California AB5, it is very difficult to classify a person who regularly works your truck as an independent 1099 contractor rather than a W-2 employee. AB5 uses an ABC test that asks whether the worker is free from your control, whether the work is outside your usual business (food service work on a food truck is squarely within the business), and whether the worker has an independently established trade. A regular helper on your food truck will rarely pass all three parts of that test. For a detailed breakdown of how AB5 affects worker classification decisions and the records you need to maintain, see our AB5 bookkeeping records guide.

What W-2 payroll requires. If you have W-2 employees, including paid family members, you are responsible for:

• Withholding federal income tax, Social Security (6.2%), and Medicare (1.45%) from each paycheck
• Paying the employer's share of Social Security (6.2%) and Medicare (1.45%)
• Registering with the EDD and remitting California payroll taxes: State Unemployment Insurance (SUI), Employment Training Tax (ETT), and State Disability Insurance (SDI)
• Filing quarterly EDD reports: the DE 9 (Quarterly Contribution Return and Report of Wages) and the DE 9C (Quarterly Contribution Return and Report of Wages, Continuation). Q1 is due April 30, Q2 is due July 31, Q3 is due October 31, and Q4 is due January 31
• Carrying workers compensation insurance (required by California law once you have even one employee)

Missing EDD quarterly filings results in penalties and interest. Workers compensation violations carry separate penalties and can expose you to significant liability if a worker is injured on the truck. For a complete overview of California payroll filing requirements for small employers, see our California payroll bookkeeping guide.

A note on compensating family members through the business. If you take cash from the truck and hand it to a family member as payment for their work without recording it as payroll, you are creating two problems at once: an unrecorded expense that is not deductible, and potential payroll tax and EDD compliance exposure. Paying family members through a proper payroll system (even a simple one) is the right structure, and the wages you pay them are a legitimate deductible business expense.

When Your Food Truck Needs a Bookkeeper

Many food truck operators in SE Los Angeles start without a bookkeeper and manage the basics on their own. That works early on, when you are operating at a single location, cash volume is manageable, and your only filing obligation is a quarterly CDTFA return. As the operation grows, the complexity compounds fast: multiple cities, multiple permits, daily cash and Square reconciliation, CDTFA sales tax remittance, payroll for helpers, and vehicle and equipment depreciation do not combine into a spreadsheet problem. They combine into a professional bookkeeping problem.

Here are the specific signals that your food truck operation has outgrown DIY bookkeeping:

• You are operating in two or more cities. Multiple permits, varying event fee structures, and potential CDTFA location questions all require clean records to manage.
• You have a CDTFA filing obligation. If you are collecting sales tax (or should be collecting it under the 80/80 rule), quarterly CDTFA returns require accurate records of your taxable sales, the tax you collected, and the tax you owe. Errors result in penalties and interest.
• You have any payroll. Even one paid helper triggers EDD registration, quarterly DE 9 and DE 9C filings, and workers compensation. Managing that alongside daily operations is a real burden.
• Your books are more than two months behind. Unreconciled cash and Square records from even two months ago are difficult to reconstruct accurately. The longer you wait, the more expensive it gets to catch up, and the higher the exposure if a CDTFA or IRS inquiry arrives.
• You cannot answer what your total taxable sales were last quarter. If you cannot produce that number quickly, you are not ready for a CDTFA audit, and you may already be filing returns with inaccurate figures.

If you are behind on your books right now, the catch-up bookkeeping guide explains what the cleanup process looks like, how long it takes, and what you need to pull together to get current.

Frequently Asked Questions

Food Truck Bookkeeping Services in SE Los Angeles

J.P Bookkeeping works with food truck and taco truck operators throughout Downey, Compton, Lynwood, South Gate, Huntington Park, Bell, Bell Gardens, and the surrounding areas of Southeast Los Angeles County. Jimmy Paz is a QuickBooks Advanced ProAdvisor who is bilingual in English and Spanish. He understands the specific financial pressures food truck operators face in California: CDTFA sales tax registration and quarterly filings, the 80/80 rule and its impact on taxable sales, daily cash and Square reconciliation, commissary and permit deductions, and EDD payroll for family-run operations.

If your CDTFA filings are behind, your cash and Square reports are not reconciling, or you are not sure whether your operation is correctly registered with the CDTFA, a free consultation is the fastest way to see where you stand and what it will take to get current. Book directly at the link or call (323) 816-0517. Atendemos en espanol.

Disclaimer: J.P Bookkeeping is a bookkeeping firm, not a CPA or law firm. For tax planning, legal questions, or regulatory compliance, consult a licensed CPA or attorney. Information reflects publicly available requirements as of June 8, 2026. Confirm current IRS rates and thresholds at irs.gov and ftb.ca.gov before filing.