Electronic Funds Transfer - EFT Frequently Asked Questions - FAQ'S

  1. Who is required to pay taxes by EFT?
  2. Can I participate on a voluntary basis?
  3. Will I be assessed a penalty for sending in my payment by check?
  4. What is the difference between ACH Debit and ACH Credit?
  5. Will I need special equipment or software to make my payments by EFT?
  6. Will I receive instructions on how to make my tax payments?
  7. What is the most common payment method?
  8. What types of payments can I make by EFT?
  9. Will I still be required to file my tax return?
  10. Will I still have to file my prepayment forms?
  11. Can I efile my return?
  12. What if I do not owe any taxes for the period?
  13. Is there a cutoff time in which I can transmit a timely payment?
  14. Can I make a payment for a future date?
  15. Are there interest and/or penalties if I make a payment after the due date?
  16. Can I make an EFT payment over the Internet if I am registered to use the ACH credit payment method?
  17. Can I change my EFT payment method?
  18. What if I change financial institutions?
  19. Do you have an ACH Debit block on your bank account?
  20. Can the BOE withdraw funds from my account without my knowledge or permission?
  21. What if I transmit more than the amount due?
  22. What if I have a problem when making a payment by EFT?
  23. What days are considered Banking Days?
  24. What if my tax due date falls on a weekend or holiday?
  25. What days are considered State Holidays?

  1. Who is required to pay taxes by EFT?

    If you have a sales and use tax permit and average monthly tax payments (over a 12 month period) of $10,000 or more, by law, you are required to participate in the EFT program.

    If you have a special taxes account with an estimated average monthly tax or fee payment of $20,000 or more, you are required to pay the tax or fee by EFT.

  2. Can I participate on a voluntary basis?

    If you are not required to make tax or fee payments through EFT, you can choose to do so on a voluntary basis.

  3. Will I be assessed a penalty for sending in my payment by check?

    If you are required to remit payments through EFT and you use another means (check, cash, credit card, etc.), you will be subject to a penalty.

    Monthly and quarterly tax or fee returns will be assessed a 10 percent penalty on the taxes or fees due.

    Sales and use tax prepayments will be subject to a six percent penalty. Special taxes program will be assessed a prepayment penalty based on the law governing your specific special taxes program.

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  4. What is the difference between ACH debit and ACH credit?

    ACH Debit - you initiate a payment by Internet or telephone to authorize the State to debit your account and credit the State's bank account. These transactions are simple and there is no cost to you, unless your financial institution charges a fee for the actual transfer of funds.

    ACH Credit - you instruct your financial institution to debit your account and credit the State's bank account. For this type of transaction you must ensure your financial institution has the ability to send ACH credit transactions in the required format (see ACH credit specifications). There are normally set-up and transaction fees for which you are responsible.

  5. Will I need special equipment or software to make my payments by EFT?

    ACH Debit - - To make online payments, you must have Internet access. To make payments by telephone, no special equipment is needed.

    ACH Credit - There may be special hardware and software requirements. Contact your financial institution for any requirements.

  6. Will I receive instructions on how to make my tax payments?

    After we have received and reviewed the completed Authorization Agreement for Electronic Funds Transfer form, we will send you a letter confirming your EFT start date. We will also provide detailed instructions on how to report your payment.

    Sales and Use Tax Authorization Agreement for Electronic Funds Transfer

    Special Taxes Authorization Agreement for Electronic Funds Transfer

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  7. What is the most common payment method?

    ACH debit is the most common payment method. The ACH debit method is simple, there is no additional cost, it requires no additional programming or special equipment except for internet access, has a very low error rate, offers the warehousing payment option. The BOE is able to assist you if an error has occurred and if it is necessary to trace a payment.

  8. What types of payments can I make by EFT?

    For sales and use tax accounts you can pay your returns and prepayments. If you are paying the lumber products assessment as part of your sales and use tax EFT payment, we recommend that you use ACH Debit payment efile or electronically pay, to pay both sales and use tax and the lumber assessment. Please note that if you use the Third Party Vendor, your payments will not be allocated properly between sales and use tax and the lumber assessment and you may need to contact us to properly process your payment.

    For special taxes accounts you can pay your returns, prepayments and accounts receivables.

  9. Will I still be required to file my tax return?

    Whether you choose the ACH debit or ACH credit method, you must continue to file your tax returns on a timely basis. The reporting due dates and filing requirements have not changed.

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  10. Will I still have to file my prepayment forms?

    If you have a sales and use tax account and file on a prepayment basis (i.e. two monthly prepayment forms and one quarterly return), you will no longer receive or be required to file the prepayment forms. You are only required to pay the prepayments through EFT. Please do not create or file any paper prepayment forms.

    Some special taxes accounts are still required to file prepayment forms, if they file on a prepayment basis.

  11. Can I efile my return?

    Nearly all sales and use tax accounts are eligible to efile tax returns.

    Currently, the only special taxes programs eligible to efile are the International Fuel Tax Agreement (IFTA) and motor fuels accounts. Additional special taxes programs will be eligible in the near future.

  12. What if I do not owe any taxes for the period?

    If you use the ACH debit method for making payments and owe no taxes or fees for the reporting period, you are still required to initiate an EFT payment using BOE-file or through the state data collection service to report a zero dollar amount.

    If you use the ACH credit method for making payments and owe no taxes for the reporting period, you must still contact your financial institution and have them make a zero dollar transaction. If your financial institution cannot initiate a zero dollar transaction, call the EFT Helpline that administers your account for further instructions.

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  13. Is there a cutoff time in which I can transmit a timely payment?

    As an EFT participant, all electronic payments made by any of the following payment methods described below must settle (be deposited) into the State’s bank account one banking day following the due date to be considered timely. Depending on what method you use, there is a cutoff in which to make a timely payment.

    • ACH Debit Payment – efile or electronically pay directly to BOE: Choosing either method, you must complete your transaction by the due date. If you efile or electronically pay on the due date, it must be completed by 3:00 p.m. Pacific time so that your funds settle into the State’s bank account by the next banking day.
    • Third Party Vendor * (EFT): If you report your EFT payment through the third party vendor and it is the due date, you must complete your transaction by 3:00 p.m. and select the next banking day as your debit date.
    • ACH Credit Payment: You must contact your financial institution to determine when to initiate your payment so that your payment settles into the State’s bank account no later than the first banking day following the due date.

      *Please note, if you are paying both your sales and use tax and lumber products assessment, the Third Party Vendor will be unable to allocate the payments between sales and use tax and the lumber assessment and you may need to contact us to properly process your payment. We recommend you use ACH Debit payment efile or electronically pay,to make a payment for both your sales and use tax and lumber products assessment.

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  14. Can I make a payment for a future date?

    You can warehouse your payment for a future date, up to the due date of the return, when paying by ACH Debit.

    Making your ACH Debit method through BOE-file allows you, after the end of the period, to warehouse your payment for any banking day you select up to the due date of the return or prepayment.

    Making your ACH Debit payment through the state’s data collection service allows you to designate any banking day (up to ninety [90]) days in advance of the due date, but you should not select a debit date beyond one banking day following the due date. The debit date is the date your payment transfers from your bank account to the BOE’s bank account. Payments that are debited more than one day following the due date will be subject to penalty and/or interest charges.

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  16. Are there interest and/or penalties if I make a payment after the due date?

    Payments that are received after the due date are subject to interest and/or penalties. A penalty of 10 percent of the tax is imposed on amounts received after the due date. Interest is also due for each month or fraction of a month the tax payment is late. Therefore, if your payment is only one day late, an entire month's interest will be imposed. However, if your payment is only one day late, you may be eligible to have your interest charge reduced to a daily interest rather than a full months interest. Interest will be computed on a daily basis rather than a monthly basis provided all of the following conditions are met:

    • The payment of the tax or prepayment was made electronically.
    • The payment of the tax or prepayment was made one day after the due date.
    • You were granted relief from all penalties that applied to your late payment of tax or prepayment.
    • You file a request for an oral hearing before the Board.

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  17. Can I make an EFT payment over the Internet if I am registered to use the ACH credit payment method?

    If you are registered to use ACH credit, you can use BOE’s efile system to pay your return or prepayment using ACH Debit over the Internet, no matter the payment method you are registered for.

    If you are using the third party processor to make your payment, you will not be able to make your payment.

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  19. Can I change my EFT payment method?

    To make a change in your payment method, you must notify us by completing a new Authorization Agreement for Electronic Funds Transfer form BOE-555-EFT (Sales and Use Tax) or BOE-555-ST (Special Taxes). Once we have updated your account of the change, we will send you a confirmation letter and complete instructions on how to report your payment.

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  20. What if I change financial institutions?

    If you are making your EFT payment by ACH debit, you must submit a new Authorization Agreement for Electronic Funds Transfer form BOE-555-EFT (Sales and Use Tax) or BOE-555-ST (Special Taxes) with the new information.

    If you are making your EFT payment by ACH credit, you do not need to notify us of the change. However, it will be necessary to contact your new financial institution to verify its ability to originate an ACH credit transaction in the required record formats.

  21. Do you have an ACH Debit block on your bank account?

    If you have selected to pay by ACH debit and have an ACH debit block on your bank account, you must inform your financial institution of the BOE's Company Identification number to avoid your tax/fee payment from being rejected. The Company Identification Number is a 10-digit number used to identify an originator of the transaction.

    Sales and Use Tax Company Identification Number: 1282531033.

    Special Taxes (including Lumber Products Assessment) Company identification Number: 1282435088

  22. Can the BOE withdraw funds from my account without my knowledge or permission?

    ACH debit payments can only be initiated by you or your authorized personnel. ACH credit payments are initiated only by you through your financial institution.

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  23. What if I transmit more than the amount due?

    If you have transmitted more than the amount due, you may call the section that administers your tax or fee program to obtain instructions for requesting a refund or possibly applying the overpayment to another reporting period.

  24. What if I have a problem when making a payment by EFT?

    If you experience any problems making an EFT payment, you may call the appropriate section listed below that administers your account.

    Sales and Use Tax EFT helpline: 916-327-4229
    Monday through Friday 7:30 a.m. and 4:30 p.m. Pacific time

    Special Taxes EFT helpline: 800-400-7115 (TTY:711)
    Monday through Friday 8:00 a.m. and 5:00 p.m. Pacific time

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  25. What days are considered Banking Days?

    Banking days are days the Federal Reserve banks are open. They are open Monday through Friday, except for the following dates:

    New Year's Day - January 1 *
    Martin Luther King Jr. Day (third Monday in January)
    Presidents Day (third Monday in February)
    Memorial Day (last Monday in May)
    Independence Day -July 4 *
    Labor Day (first Monday in September)
    Columbus Day (second Monday in October)
    Veterans Day - November 11 *
    Thanksgiving Day (fourth Thursday in November)
    Christmas Day - December 25 *
    *If this day falls on a Sunday, the banks are closed the following Monday

  26. What if my tax due date falls on a weekend or holiday?

    If a tax or fee due date falls on a weekend or holiday (national or State of California), the payment is due on the first business day following the weekend or holiday. For example, if the tax or fee due date is January 31 and that date falls on a Saturday, the tax or fee due date will become Monday, February 2 and the funds must settle into the Board's bank account by February 3.

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  27. What days are considered State Holidays?

    State holidays are holidays recognized by the State of California:

    New Year's Day - January 1 *
    Martin Luther King Jr. Day (third Monday in January)
    Presidents Day (third Monday in February)
    Cesar Chavez Day - March 31 *
    Memorial Day (last Monday in May)
    Independence Day - July 4 *
    Labor Day (first Monday in September)
    Veterans Day - November 11 *
    Thanksgiving Day (fourth Thursday in November **)
    Day after Thanksgiving - Friday after Thanksgiving **
    Christmas Day - December 25 *

    * If this date falls on a Sunday, the holiday is observed on the following Monday.
    ** If the tax due date falls on Thanksgiving Day or the day after, the tax due date will move to the following Monday. In addition, if the due date falls on the Wednesday before Thanksgiving, the payment must settle into the Board’s account by the day after Thanksgiving.

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