When Is California Sales Tax Due for My Business?

Understanding when California sales tax is due is important for businesses operating within the state. Sales tax is a levy on the retail sale of tangible personal property, and businesses act as collection agents for the state. Timely filing and remittance of these taxes ensure compliance with state regulations and help avoid financial repercussions. Businesses must accurately track their sales and collected tax amounts.

Who Files California Sales Tax

Businesses or individuals selling or leasing tangible personal property at retail are generally required to collect and remit California sales tax. This includes both wholesalers and retailers. The California Department of Tax and Fee Administration (CDTFA) oversees sales and use tax administration. Businesses must obtain a seller’s permit from the CDTFA before commencing operations that involve taxable sales. This permit authorizes the business to collect sales tax from customers.

The requirement to hold a seller’s permit applies to various business structures, including individuals, corporations, partnerships, and limited liability companies. Even if sales are temporary, such as at seasonal events or rummage sales, a temporary seller’s permit might be necessary.

Determining Your Filing Frequency

The CDTFA assigns businesses a specific sales tax filing frequency: monthly, quarterly, or annually. This assignment is based on the business’s average taxable sales volume. Higher sales volumes result in more frequent filing requirements to ensure a steady flow of tax revenue to the state.

Businesses with an average monthly sales tax liability of $17,000 or more are required to file monthly and make prepayments. Those with an average monthly sales tax liability between $101 and $17,000 are assigned a quarterly filing frequency. Businesses with an average monthly sales tax liability of $100 or less may file annually. The CDTFA notifies businesses of their assigned filing frequency after they register for a seller’s permit.

Key California Sales Tax Due Dates

Sales tax due dates in California vary depending on the assigned filing frequency, with returns due by the last day of the month following the reporting period. For monthly filers, returns are due by the last day of the month for the previous month’s sales. For example, sales collected in January are due by February 28th (or 29th in a leap year).

Quarterly filers have specific due dates:
First quarter (January-March) return is due by April 30.
Second quarter (April-June) return is due by July 31.
Third quarter (July-September) return is due by October 31.
Fourth quarter (October-December) return is due by January 31 of the following year.
If any due date falls on a weekend or state holiday, the deadline is extended to the next business day.

Businesses required to make prepayments have additional due dates. Prepayments are due by the 24th day of the month in every month when a sales tax return is not filed. For instance, the prepayment for January sales is due by February 24th, and for February sales by March 24th. The prepayment amount is at least 90% of the tax liability for the previous month. Annual filers have a single due date of January 31st of the following year.

Submitting Your Sales Tax Return

After preparing your California sales tax return, the primary method for submission is online through the CDTFA’s website using your my CDTFA account. This digital platform allows for efficient and secure filing. Businesses log in, navigate to their sales and use tax account, and proceed with the filing process.

The online portal guides users through reviewing their prepared return data, ensuring accuracy before final submission. Payment options are integrated into the online filing system. Businesses can make payments directly from their bank account via Electronic Funds Transfer (EFT) without service fees. Credit card payments are also an option, though a service fee is charged by the processing vendor. Businesses with an annual tax liability of $10,000 or more are required to pay via EFT.

While online filing is the preferred method, businesses may also have the option to file by mail. After successful online submission, businesses receive a confirmation number or receipt. Maintaining accurate records of all submitted returns and payment confirmations is important.

Consequences of Late Filing

Failing to file a California sales tax return or pay the sales tax by its due date can result in penalties and interest charges. A common penalty for late filing or late payment is 10% of the tax amount due for the reporting period. If both the return and payment are late, the penalty does not exceed 10% of the tax due.

Interest accrues on any unpaid tax amounts, starting from the original due date until the tax is paid. This interest is calculated daily and adds to the total liability. For businesses required to make prepayments, a late prepayment can incur a 6% penalty if paid before the return’s due date, which can increase to 10% with further delay. In cases where the failure to file or pay is due to negligence or intentional disregard of the law, additional penalties, such as a 25% penalty for fraud, may be imposed. The CDTFA may offer relief from penalties if the taxpayer can demonstrate reasonable cause and diligence.