# Month-end close: sales tax in California California's rate depends on the delivery address, and a client with large sales makes prepayments on the 24th before the return is due. This is part of the [sales tax checklist](/month-end-close-checklist/sales-tax). California sales and use tax is filed with the California Department of Tax and Fee Administration (CDTFA). A business that sells or leases goods that would normally be taxable at retail needs a seller's permit, and there's no fee, though the CDTFA may ask for a security deposit [10]. **Rate.** 7.25% statewide. Inside a special tax district the rate is 7.25% plus the district's rate, so it depends on where the goods are delivered. **Filing.** The CDTFA assigns a basis at registration: quarterly prepay, quarterly, monthly, fiscal yearly or yearly. Use the basis on the client's CDTFA account. **Due.** Quarterly returns are due April 30, July 31, October 31 and January 31. Monthly returns are due on the last day of the following month. A due date on a weekend or state holiday moves to the next business day. **The trap.** A client with average monthly taxable sales of $17,000 or more makes prepayments, due on the 24th, once the CDTFA notifies them. They come off the quarterly return on Line 22, and a late prepayment costs 6%. ## The month-end steps 1. **Confirm what's taxable.** Check how the client's sales are taxed in the CDTFA's guide for their industry, listed on its [industry guides page](https://cdtfa.ca.gov/industry/) [1]. Done when each kind of sale the client makes has been checked against its guide. 2. **Sales for resale.** A sale for resale is untaxed only if the buyer gives a resale certificate. Any document can serve, including a letter or a purchase order, if it has all the required details, among them the words "for resale"; "nontaxable" or "exempt" won't do. The CDTFA's own form, the CDTFA-230, is optional [2]. Keep copies of every resale certificate, and the purchase orders that came with them, to support the sales for resale [3]. Done when every sale for resale in the month has a valid certificate on file. 3. **The rate.** Outside every special tax district, the rate is generally the statewide 7.25%. Inside a district, it's 7.25% plus the district's rate, so the rate depends on where the goods are delivered. A seller that isn't engaged in business in a district doesn't have to collect that district's part [4]. Look up the rate for an address with the CDTFA's [online mapping tool](https://maps.cdtfa.ca.gov/) [5] or its [rate guide](https://cdtfa.ca.gov/taxes-and-fees/sales-use-tax-rates.htm) [6]. Done when each taxable sale carries the rate for its delivery address. 4. **The filing basis and prepayments.** The CDTFA assigns a basis at registration: quarterly prepay, quarterly, monthly, fiscal yearly or yearly. Use the basis on the client's CDTFA account; if the client doesn't know it, the CDTFA will tell them [1] [7]. Businesses with average monthly taxable sales of $17,000 or more make prepayments, due on the 24th [8], once the CDTFA notifies them [9]. The CDTFA's [Form CDTFA 367](https://cdtfa.ca.gov/formspubs/cdtfa367sut.pdf) sets out the prepayment due dates and instructions [7]. On the quarterly return, the prepayments are subtracted on Line 22, Less Tax Prepayments. That credit is the tax prepaid only, not penalties or interest paid with it, and a month with no prepayment due because there were no taxable sales is certified with the box below that month's field [9]. Payment by electronic funds transfer is required once average monthly sales tax payments over 12 months are $10,000 or more [1]. | # | Basis | Period | Return due [7] | |---|---|---|---| | 1 | Quarterly | January to March, April to June, July to September, October to December | April 30, July 31, October 31, January 31 | | 2 | Monthly | Each month | The last day of the following month | | 3 | Yearly | January to December | January 31 | | 4 | Fiscal yearly | July to June | July 31 | | 5 | Quarterly prepay | Monthly prepayments, then a quarterly return | Each prepayment by the 24th of the following month (January's by February 24), and the return by the quarterly date | 5. **The return, the CDTFA-401-A.** The State, Local, and District Sales and Use Tax Return starts with Line 1, total sales, and Line 2, purchases subject to use tax. Then come the deductions, such as Line 4, sales to other retailers for resale; Line 5, nontaxable sales of food products; and Line 8, sales in interstate or foreign commerce. Line 11 totals the nontaxable transactions, and Line 12 gives the transactions subject to state tax. The tax is then split: Line 13 is the state tax at 6.00%, Line 14 the county tax at ΒΌ%, Line 15 the local tax at 1.00%, and Line 16 the district tax. Line 17 adds Lines 13 to 16 for the period's total tax. Line 22 subtracts the prepayments made. The return also lets you recover tax on bad debts and on cash discounts on taxable sales [9]. Have the period's sales, the deductions from them and the purchases that owe use tax ready before you start [1]. File a return even when there were no sales [7]. Done when Line 1 ties to the period's sales in the books, Line 4 to the sales backed by resale certificates, Line 16 to the district tax collected, and Line 17, less Line 22, to the sales tax payable account. 6. **The due date.** A due date on a weekend or state holiday moves to the next business day [7]. The CDTFA's return instructions don't mention a collection allowance [9]. What late costs [8]: 10% of the tax if the return is late and 10% if the payment is late, capped together at 10% of the tax due for the period; interest for each month, or part of a month, that the payment is late; 6% for a late prepayment made before the return's due date; and 10% of the tax for paying another way when the client must pay by electronic funds transfer. Done when the return is filed by its due date and the sales tax payable account is at zero once it's paid, less any prepayments. ## Sources 1. CDTFA, Tax Guide for New Permit and License Holders: filing and payments, read 2026-10-19: a reporting basis is assigned at registration (quarterly, quarterly prepay, monthly, yearly, fiscal yearly), and the CDTFA will tell you yours; before filing, gather sales transactions and deduction information and purchase information for use tax; links to the industry guides and the Tax Guide for Local Jurisdictions and Districts; EFT is required if average monthly sales tax payments over 12 months are $10,000 or more. 2. CDTFA, Publication 103, Valid resale certificates, read 2026-10-19: any document can serve as a resale certificate if it contains all the required information, including "for resale"; "nontaxable" or "exempt" are not acceptable; the CDTFA-230 is optional. 3. CDTFA, Publication 103, Documenting and reporting sales, read 2026-10-19: a seller should retain copies of all resale certificates and the purchase orders issued with them. 4. CDTFA, Publication 105, Basic rules, read 2026-10-19: outside special tax districts the rate is generally the statewide 7.25%; inside a district it's the statewide rate plus the district rate; a seller not engaged in business in a district isn't required to collect its tax. 5. CDTFA, Publication 105, District taxes and sales delivered in California, read 2026-10-19: an online mapping tool gives the current rate for a specific address. 6. CDTFA, Know your rate, read 2026-10-19: links to the rate lookup and the sales and use tax rates page. 7. CDTFA, Sales and use tax returns filing dates, read 2026-10-19: assigned filing frequencies; a filing is required even with no sales; weekend and state-holiday due dates move to the next business day; quarterly, monthly, yearly, fiscal yearly and quarterly prepay due dates. 8. CDTFA, Publication 75, Interest, penalties and fees, read 2026-10-19: 10% for late filing and 10% for late payment, capped together at 10% of the tax due for the period; interest for each month or fraction late; prepayments for monthly average taxable sales of $17,000 or more, due on the 24th; 6% for a late prepayment; 10% for not paying by EFT when required. 9. CDTFA, Instructions for the CDTFA-401-A, State, Local, and District Sales and Use Tax Return, read 2026-10-19: Lines 1, 2, 4, 5, 8 and 11 to 17, and Line 22, Less Tax Prepayments (prepayments once notified, tax prepaid only, a box to certify no prepayment due); bad debt and cash discount recoveries; no collection allowance mentioned. 10. CDTFA, Obtaining a seller's permit (FAQ), read 2026-10-19: who needs a permit; wholesalers and retailers must apply; no fee, but a security deposit may be required. --- Published 2026-10-24. Web page: https://www.bookkeepingforsmallbusiness.com/month-end-close-checklist/sales-tax/california Part of [Month-end close: sales tax by jurisdiction](https://www.bookkeepingforsmallbusiness.com/month-end-close-checklist/sales-tax).