California Sales Tax Guide
Chapter 5: Filing and paying California sales tax
You're registered with the California Board of Equalization and you've begun collecting sales tax. Congratulations! Remember, those tax dollars don't belong to you. As an agent of the state of California, your role is that of intermediary transferring tax dollars from consumers to state and local tax authorities. Let's take a deeper look at how filing California sales tax returns impacts your business.What does it mean to file an California sales tax return?
Technically speaking, filing California sales tax returns is a two-step process comprised of submitting the required sales data and remitting the collected tax dollars (if any) to state and local tax authorities.
In most states, there are a number of options for submitting sales tax data to the state. Business owners may complete a California sales tax filing form and mail it to the California Board of Equalization or they can file electronically online. In all states, filing online is recommended.
The filing process forces the business owner to detail their total sales, the amount of sales tax they have collected, and from where. The California Board of Equalization wants to be kept up to date on your business growth (or lack thereof) to make sure they are getting the tax dollars due. By completing ongoing filing of monthly, quarterly, or semi-annual, or annual California sales tax returns, they stay abreast of your growing company.When am I required to file my sales tax return?
The California Board of Equalization will assign you a filing frequency. Typically, this is determined by the size of your business. State governments typically ask larger businesses to file more frequently. Visit our California filing due dates page for more information.Am I required to file and pay my California sales tax at the same time?
California sales tax returns must be filed and paid at the same time and are governed by the same due date.I want to webfile my California sales tax. What are my options?
Avalara has built the TrustFile product to allow business owners a quick and easy way to prepare and webfile California sales tax returns. Users can sign up and use the service to prepare California returns free for 30-days.
Filers may also file directly with the California Board of Equalization by visiting their site and entering your transaction data manually. This is a free service, but preparing California sales tax (breaking it down by jurisdiction) can be time consuming - especially for larger sellers.Can a 3rd party file my sales tax on my behalf?
Yes! Many business owners recognize they are not a tax professional and therefore, choose to outsource their sales tax sales and use tax filing to services like Avalara TrustFile or to an accountant or bookkeeper. This is a normal business practice that can save business owners time and help them avoid costly mistakes due to inexperience and a lack of deep knowledge about California sales tax code.What happens if I file or pay my sales tax return late?
Businesses who file a late California sales tax return and/or make a late California sales tax payment are liable for interest and penalties charges.Do I need to file a return if I didn't collect any sales tax in California?
Yes! Once you've successfully registered for and been issued a seller's permit, you are required to file at the completion of each assigned collection period regardless of whether any sales tax was collected. This is what is known as a "zero-tax filing".
Failure to submit a required zero-tax filing can result in penalties imposed on your business by the California Board of Equalization so don't take this responsibility lightly.If I close my business, do I need to file a final sales tax return?
Yes! The California Board of Equalization requires all businesses to "close their books" by filing a final sales tax return. This also holds true for business owners selling or otherwise transferring ownership of their business.Does the California Board of Equalization offer a discount for filing on time?
At this time, the California Board of Equalization does not offer sales tax filers a vendor discount.