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California Sales and Use Tax Recordkeeping Requirements

  • May 11, 2012 | Susan McLain

The California State Board of Equalization has revised its pamphlet on record keeping requirements for sales and use tax permit holders.

Publication 116, Sales and Use Tax Records requires the following records should be maintained and kept by permit holders:

  • Normal books of account that show income and expenses.
  • Invoices, receipts, job orders, purchase orders, contracts, or other documents used as the basis for books of account.
  • All schedules or working papers used in preparing your sales and use tax returns.

Information that should be evident in the records kept includes:

  • Gross receipts from income.
  • Deductions claimed on sales and use tax returns as well as support documentation.
  • Total purchase price, including receipts for resale and lease purchases as well as business use items.

Records Retention

All reporting periods before January 1, 2003 must be kept for at least 10 years IF the permit holder did not participate in the 2005 tax amnesty program or if questionable transactions are discovered during an audit.

All other records must be kept for at least four years, unless specific, written authorization is provided by the California State Board of Equalization.

Records Format

Records may be kept in paper or electronic form or in storage media such as removable disks or films.

Industry Specific Requirements

The following industries have more complex sales and use transactions, so there are specific record keeping requirements provided in the industry-specific publications:

  • Bars and restaurants
  • Construction contractors
  • Motor vehicle dealers

Permit holders in these industries are encouraged to contact the Taxpayer Information Section at 800-400-7115.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Susan McLain
Avalara Author Susan McLain
Susan McLain began her career as a technical writer in technology industries such as satellite networking and medical devices. Her skills encompass technical and marketing writing, usability engineering, verification and validation testing and protocol writing, requirements development, business analysis, technical illustration/graphic design and marketing. She has owned her own business providing service to small to medium sized business and in other positions, she has been in project management, documentation and marketing. She is currently the content specialist for Avalara helping to “make sales tax less taxing.”