Reporting Taxes

1. What is a sales and use tax return?
2. When do I file the tax return form?
3. If I cannot file my return or pay the tax on time, can I request an extension?
4. What happens if I file a late tax return or my tax payment is overdue?
5. If I don't owe taxes, do I still file a return?
6. How do I pay the taxes that are due?
7. Can I round to the nearest dollar?
8. What happens if I do not file a tax return?
9. What are prepayment accounts?
10. If I sell or distribute fuels, am I subject to special rules for payment of sales tax?
11. If a customer pays after the tax reporting period, or pays in installments, when is the tax due?
12. I report taxes annually. If I close or sell my business, when do I report taxes?
13. Where can I get help in filling out a tax return?
14. My accountant prepares my tax returns. Can my returns be mailed to my accountant?

1. What is a sales and use tax return?

A sales and use tax return is a form used by holders of seller's permits to report the payment of sales and use taxes to the Board of Equalization. Permit holders are required to file a standard State, Local & District Sales and Use Tax Return. Based on the types of deductions claimed, some businesses may qualify to use the Short Form-Sales and Use Tax Return.

Back to Top of Page

2. When do I file the tax return form?

When you obtain your seller's permit, you will be instructed to file your tax return on a monthly, quarterly, or annual basis (the determination is based on the volume of sales expected for your business). The Board will send you a tax return form at the close of each reporting period. The filing due date is printed at the top of the return.

If you do not receive your tax return form within 15 days after the end of the reporting period for your business, you should call the Board's Information Center at 800-400-7115. You must file a tax return; failure to receive a return from the Board does not excuse you from the requirement to file.

You must file your returns on a timely basis, as described below:

Mailed returns. Mailed returns, forms, and payments must be postmarked on or before the specified due date. Be sure to drop off your return before the daily postal pickup to ensure a timely postmark. If the due date falls on a Saturday, Sunday, or legal holiday, returns postmarked by the next business day are considered timely.

Hand-delivered returns. Hand-delivered returns, forms, and payments must reach Board offices on or before the due date. If the due date falls on a Saturday, Sunday, or legal holiday, returns received by the next business day are considered timely.

Payments made by electronic funds transfer (EFT). If you are registered to pay taxes electronically, you must still file a hard copy of your return on a timely basis, whether mailed or hand-delivered. For more information on electronic tax payment due dates, please refer to Publication 80, Electronic Funds Transfer Information Guide.

Returns filed through the Internet. Some returns can be filed online through the Board's Electronic Services. You must file and pay by the tax due date for your reporting period.

Back to Top of Page

3. If I cannot file my return or pay the tax on time, can I request an extension?

If you need more time to file your return and pay the tax due, the Board may, for good cause, extend the due date by one month and waive the late filing and/or late payment penalties that would otherwise apply. Interest accrues during the extension period and thereafter until the liability is paid. Extensions are not granted automatically and are only granted after review and approval of the request. If you are unable to file your return on time, you should contact your local Board office to learn whether you qualify for an extension. (The law does not recognize lack of funds as good cause.)

To request a filing extension, please submit, no later than one month following the due date of your return or prepayment form and payment, the following:

• Your completed, signed, and dated return or prepayment form.
• A completed Form BOE-468, Request for an Extension of Time . Be sure to explain why you were not able to file your return or pay the tax on time, and to fully complete, sign, and date the form.
• The tax due, plus applicable interest. (Interest will apply to your delayed payment, as explained on the Request for Extension. Please use the formula shown on the return form to calculate the interest due.)

Note for Sales and Use Tax Prepayments: Please do not include interest with your tax payment. If your request is approved, a billing for any interest due will be sent to you.

We will review your extension request. If your request for an extension is approved, we will waive the late filing and/or late payment penalties for this filing period only. If we find that there is not good cause for approving an extension of time, or if you did not send your request, payment, and return within the one-month extension period, a billing will be sent to you for the late filing penalty.

If you need additional information, please call the Board's Taxpayer Information Center (800-400-7115) or your local Board office. Sales and Use Tax Electronic Fund Transfer (EFT) accounts should contact the EFT helpline (916-327-4229).

Back to Top of Page

4. What happens if I file a late tax return or my tax payment is overdue?

If you file a late return and/or make a late tax payment, you are liable for interest and penalty charges. If you pay your full tax liability on time but do not file your return on time, you are still liable for a penalty or filing a late return. For more information on these charges, please refer to Publication 75, Interest and Penalty Charges or call us at 800-400-7115.

Under limited circumstances, the Board may allow additional time (up to one month) for filing a return. If the additional time is granted and the return is filed and paid within the time, you will owe interest on the payment but will not be required to pay the penalty. If you are unable to file your return on time, you should contact your local Board office to learn whether you qualify for an extension. (The law does not recognize lack of funds as good cause.)

Back to Top of Page

5. If I don't owe taxes, do I still file a return?

Yes. You must file a tax return even if no taxes are owed for the reporting period. So, even if you have no sales for the period, or all your sales are nontaxable, you must still file a return.

Back to Top of Page

6. How do I pay the taxes that are due?

• Pay by check or money order through the mail or at any Board office. Make your payment payable to the State Board of Equalization.
• Pay by credit card. This option is only available to businesses that file a paper return and who are not required to pay by electronic funds transfer (explained below). The following credit cards are accepted: Discover Networks, Visa, MasterCard and American Express. Instructions for charging your payment are provided with your tax return.
• Pay and file on the Internet. This option is only available to certain businesses. It is not available to businesses that are required to pay by electronic funds transfer (explained below). To find out if you are eligible and to learn how to file and pay online, please see Electronic Services. Currently, payments are made by debiting your bank account.
• Pay by electronic funds transfers (EFTs). EFT payments are currently required for businesses that pay an average of $10,000 per month in sales and use taxes. Other businesses can make EFT payments on a voluntary basis. For more information, please refer to Publication 80, Electronic Funds Transfer Information Guide or call the Board's Information Center at 800-400-7115.

Reminder: Regardless of how you pay, you must make your payments on time and file a timely return.

Back to Top of Page

7. Can I round to the nearest dollar?

Yes. You may round to the nearest whole dollar on your tax return. An amount of less than 50 cents would be rounded to the next lowest dollar, and an amount of 50 cents or more would be rounded to the next highest dollar. For example, $127.49 would be rounded to $127.00 and $127.50 would be rounded as $128.00.

Back to Top of Page

8. What happens if I do not file a tax return?

You will be contacted by the Board and asked to file the required tax return. If you do not file, your seller's permit may be revoked, which would legally prevent you from operating your business. If at this point you continued to operate your business, the Revenue and Taxation Code, Section 7153, provides that you would be guilty of a misdemeanor, which is punishable by a fine of $1,000 to $5,000 or imprisonment for up to one year, or both.

Back to Top of Page

9. What are prepayment accounts?

Businesses with average taxable sales of $17,000 or more per month are required to make prepayments to the Board. You will be notified in writing if this requirement applies to you. Please do not make prepayments without written authorization.

Back to Top of Page

10. If I sell or distribute fuels, am I subject to special rules for payment of sales tax?

If you are a producer, distributor, broker, or jobber of certain fuels, you are required to collect a prepayment of a portion of the sales tax when you distribute or sell the fuels inside California. You must report and pay the amounts you collect on special "SG" returns. If you are a retailer or other seller of fuel who has prepaid sales tax to your suppliers, you can reimburse yourself by claiming a credit for the prepaid tax when you file your sales tax returns. For more information, please call the Board's 800 Information Center at 800-400-7115, or see Publication 82, Prepaid Sales Tax on Sales of Fuel.

Back to Top of Page

11. If a customer pays after the tax reporting period, or pays in installments, when is the tax due?

Tax is due for the period in which the sale takes place--when a customer takes possession of or title of an item. This is true whether you receive payment at that time or at a later date. Accordingly, you must report credit or charge sales for the period in which they occur, regardless of when you receive payment.

Lease payments, however, are treated differently. They are generally reported for the period in which you receive them, regardless of when the taxable lease began. You would not report any unpaid lease balances due. (Different rules apply to leases of trucks, aircraft, and other mobile transportation equipment.)

For detailed information on leases, please refer to Regulation 1660, Leases of Tangible Personal Property--In General, or Regulation 1661, Leases of Mobile Transportation Equipment or Publication 46, Tax Tips for Leasing of Tangible Personal Property in California.

If you report a charge or credit sale and later find you cannot collect payment for it, you may be able to take a "bad debt" deduction on your sales and use tax return.

Back to Top of Page

12. I report taxes annually. If I close or sell my business, when do I report taxes?

You are required to file a final tax return when closing your business. If you close your business between January 1 and March 31, you must file your final sales and use tax return by April 30. If you close between April 1 and June 30, the filing date is July 31. If you close between July 1 and September 30, the filing date is October 31. If you close between October 1 and December 31, you must file by January 31.

You should contact your nearest Board office or the Board's Information Center at 800-400-7115 to obtain a sales and use tax return to use at the time you close your business. Failure to file a timely return will result in interest and penalty charges.

Back to Top of Page

13. Where can I get help in filling out a tax return?

You may phone the Board's Information Center 800-400-7115 or visit your nearest Board office for assistance. Staff will explain how to complete the tax return correctly. Although they cannot prepare the return for you or review your records to determine what amounts to report, they will be glad to explain what information is required and how to enter it on the form.

Back to Top of Page

14. My accountant prepares my tax returns. Can my returns be mailed to my accountant?

Yes. You can ask the Board to mail your sales and use tax returns directly to your accountant. Other Board correspondence will continue to be mailed to your address of record. An accountant must have at least five BOE accounts for which they are authorized to receive returns in order to participate in this program. To request this service, you must complete form BOE-91, Authorization To Send Tax Returns to Other Than the Taxpayer. To obtain a copy, please call our Information Center at 800-400-7115.

Back to Top of Page