Instructions for Form CDTFA-401-GS "State, Local, and District Sales and Use Tax Return" - California

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Download Instructions for Form CDTFA-401-GS "State, Local, and District Sales and Use Tax Return" - California

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CDTFA-401-GSIN REV. 14 (7-18)
STATE OF CALIFORNIA
CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION
Instructions for Completing CDTFA-401-GS, State, Local, and
District Sales and Use Tax Return
You Can Easily File Your Return Online
Online filing of a return is a more efficient method of filing your sales and use tax return. It is much easier than filing a
paper return. When you file your return online with the California Department of Tax and Fee Administration (CDTFA), the
system calculates tax due based on the sales and deduction information you enter. Online filing helps reduce errors by
prompting you when items are missed. By ensuring the accuracy of your return you can avoid interest, overpayment, and
penalties due to reporting incorrect information.
Once you have completed and transmitted your return to the CDTFA, the return is automatically posted to your account.
By filing your return online you avoid additional costs for postage or having your return lost in the mail.
You can also file your return early and set a future date to make your payment as long as the payment is made prior to
the due date of the return.
To file your return online, go to
www.cdtfa.ca.gov
and select File a Return.
Making Your Payment
There are three easy and convenient payment options available.
ACH Debit Method
You can file and pay your return in one easy transaction. This is the preferred method for making a payment on a return.
• Enter your banking information (bank account number and bank routing number).
• Select a payment date. Payments may be held for any banking day you select up to the tax due date.
Credit Card Payment
You can pay by credit card through a third-party vendor:
®
®
®
®
• American Express
, Discover
, MasterCard
, and Visa
cards are accepted. A service fee of 2.3 percent of the
transaction amount will be charged by the third-party vendor. This service fee is not paid to or retained by the CDTFA.
You must return to the online filing system after making your credit card payment to complete your filing.
Paper Check
• Choose this option to print out a payment voucher to mail in with your check.
• Print the confirmation page and payment voucher. This voucher is only available immediately after filing your return.
• Mail in your check with the payment voucher.
Payment Methods When Filing Paper Returns
• Check or Money Order: Make your check or money order payable to the California Department of Tax and Fee
Administration and write your account number on the check or money order. Be sure to enclose your payment with
your return.
• Credit Card: You can charge your tax return payment if you have an American Express
®
®
®
, Discover
, MasterCard
, or
Visa
®
credit card. Other cards cannot be accepted.
To make credit card payments, visit the CDTFA website at www.cdtfa.ca.gov, or call 1-855-292-8931. The credit card
processing vendor will charge a service fee of 2.3 percent of the amount charged. This service fee is not paid to or
retained by the CDTFA.
Note: Never send cash payments through the mail.
If you are required by the CDTFA to pay taxes by Electronic Funds Transfer (EFT), you must continue to use that method.
Additional information is available on the CDTFA website at www.cdtfa.ca.gov.
General Information
These instructions are provided to assist you with completing your California sales and use tax return. If you need assistance,
please call the CDTFA Customer Service Center toll-free at 1-800-400-7115 (TTY:711). Customer service representatives can
help you with general questions weekdays from 8:00 a.m. to 5:00 p.m. (Pacific time), except state holidays.
You must file a return even if you do not owe taxes for the reporting period. If you are unable to file your return on time, you
may qualify for an extension. A request for an extension of time to file a tax return may be submitted online by logging in to
your account with your Username and Password on our website at
https://onlineservices.cdtfa.ca.gov/
and select the Relief
Request option.
1
CDTFA-401-GSIN REV. 14 (7-18)
STATE OF CALIFORNIA
CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION
Instructions for Completing CDTFA-401-GS, State, Local, and
District Sales and Use Tax Return
You Can Easily File Your Return Online
Online filing of a return is a more efficient method of filing your sales and use tax return. It is much easier than filing a
paper return. When you file your return online with the California Department of Tax and Fee Administration (CDTFA), the
system calculates tax due based on the sales and deduction information you enter. Online filing helps reduce errors by
prompting you when items are missed. By ensuring the accuracy of your return you can avoid interest, overpayment, and
penalties due to reporting incorrect information.
Once you have completed and transmitted your return to the CDTFA, the return is automatically posted to your account.
By filing your return online you avoid additional costs for postage or having your return lost in the mail.
You can also file your return early and set a future date to make your payment as long as the payment is made prior to
the due date of the return.
To file your return online, go to
www.cdtfa.ca.gov
and select File a Return.
Making Your Payment
There are three easy and convenient payment options available.
ACH Debit Method
You can file and pay your return in one easy transaction. This is the preferred method for making a payment on a return.
• Enter your banking information (bank account number and bank routing number).
• Select a payment date. Payments may be held for any banking day you select up to the tax due date.
Credit Card Payment
You can pay by credit card through a third-party vendor:
®
®
®
®
• American Express
, Discover
, MasterCard
, and Visa
cards are accepted. A service fee of 2.3 percent of the
transaction amount will be charged by the third-party vendor. This service fee is not paid to or retained by the CDTFA.
You must return to the online filing system after making your credit card payment to complete your filing.
Paper Check
• Choose this option to print out a payment voucher to mail in with your check.
• Print the confirmation page and payment voucher. This voucher is only available immediately after filing your return.
• Mail in your check with the payment voucher.
Payment Methods When Filing Paper Returns
• Check or Money Order: Make your check or money order payable to the California Department of Tax and Fee
Administration and write your account number on the check or money order. Be sure to enclose your payment with
your return.
• Credit Card: You can charge your tax return payment if you have an American Express
®
®
®
, Discover
, MasterCard
, or
Visa
®
credit card. Other cards cannot be accepted.
To make credit card payments, visit the CDTFA website at www.cdtfa.ca.gov, or call 1-855-292-8931. The credit card
processing vendor will charge a service fee of 2.3 percent of the amount charged. This service fee is not paid to or
retained by the CDTFA.
Note: Never send cash payments through the mail.
If you are required by the CDTFA to pay taxes by Electronic Funds Transfer (EFT), you must continue to use that method.
Additional information is available on the CDTFA website at www.cdtfa.ca.gov.
General Information
These instructions are provided to assist you with completing your California sales and use tax return. If you need assistance,
please call the CDTFA Customer Service Center toll-free at 1-800-400-7115 (TTY:711). Customer service representatives can
help you with general questions weekdays from 8:00 a.m. to 5:00 p.m. (Pacific time), except state holidays.
You must file a return even if you do not owe taxes for the reporting period. If you are unable to file your return on time, you
may qualify for an extension. A request for an extension of time to file a tax return may be submitted online by logging in to
your account with your Username and Password on our website at
https://onlineservices.cdtfa.ca.gov/
and select the Relief
Request option.
1
CDTFA-401-GSIN REV. 14 (7-18)
Lines 1 through 3—Page 1
Sales • Purchases Subject to Use Tax
Line 1. Total Sales (gross receipts)
Enter your total taxable and nontaxable sales for the reporting period, including lease and rental receipts.
Report all sales (in any manner) related to California business. You will deduct current period nontaxable transactions in
Sections A through E on page 2.
Notes:
• Include all charges related to your sales, such as labor, service, and shipping and handling charges.
• If you sold any business assets, such as fixtures and equipment, during the reporting period you must report the
sale. If you are filing your final return and reporting the sale of the business assets, see the last bullet under “Line 2.
Purchases Subject to Use Tax.”
• Your total sales may include amounts for California sales or use taxes. If this is the case, be sure to deduct those tax
amounts on line 9. If you do not, you will overpay tax.
Line 2. Purchases Subject to Use Tax
Enter your total purchases that are subject to use tax, as explained below.
Your purchases of merchandise, equipment, and other tangible personal property are subject to use tax and must be
reported if you:
• Purchased the property from an out-of-state retailer who did not collect California use tax, or
• Purchased the property with a resale certificate or other exemption certificate, and
• Used the property in California for a purpose other than (1) resale or (2) demonstration, retention, or display while
holding it for sale in the regular course of business.
You must also report your purchase of a vessel or aircraft if you (1) purchased it from an unlicensed retailer who did not
charge tax on the transaction and (2) used the property for a purpose other than resale as described above.
Enter the amount you paid for the property.
Notes:
• If you paid another state’s sales or use tax on your purchase, do not include the tax payment as part of your purchase
price. You may be eligible for a credit for the other state’s tax (see line 20c).
• If you are reporting property purchased with a resale certificate, report the purchase price on the tax return for the
reporting period during which you first used the property in California.
• If you are reporting property purchased from an out-of-state retailer who did not charge you California tax, report the
purchase price on the tax return for the reporting period during which you first used the property in California.
• If you are closing out your seller’s permit and have sold fixtures and equipment, you should report the sales price and
identify the sale as “fixtures and equipment” on line 2 of your final sales and use tax return. You must also report any
inventory you intend to retain for your own use or for use as a gift, that was purchased for resale without the payment
of tax or tax reimbursement, on line 2 of your final sales and use tax return and identify it as “retained inventory”.
• Sales to other retailers for purposes of inventory to another retailer or to the purchaser of your business are not
taxable, but should be reported as “sales resale” on line 4 of your return. A resale certificate should be obtained from
the buyer and saved in your records. For more detailed information, see
publication
74, Closing Out Your Account.
Line 3. Total
Add lines 1 and 2. Enter the result on line 3.
Page 2
Full Deductions, Current Period Tax Recoveries and Deductions, and Current Period Partial Tax Exemptions
Full deductions in Section A and B are transactions not subject to tax and will be subtracted from the total on line 3.
Report your current period partial tax exempt transactions from Sections C, D, and E on Section E, line 4 and on page 1,
line 20a. Complete CDTFA-531-Q, Schedule Q - Tax Recovery, to claim prior period tax recovery credits on page 1, line
20b.
You must maintain records that support all claimed deductions.
2
CDTFA-401-GSIN REV. 14 (7-18)
Section A. Full Deductions—Page 2
Any transaction(s) under this section must be included on line 1, Total Gross Sales on page 1.
Line 4. Sales to Other Retailers for Purposes of Resale
Enter your total sales to other sellers who submitted resale certificates to you for their purchases.
In general, you can accept resale certificates from other sellers who are buying property to resell in the regular course of
business. If you obtain a timely and valid resale certificate, taken in good faith, tax will not apply to your sale. See
CDTFA-230, General Resale Certificate.
To be valid, resale certificates must contain specific information. For more information, see
Regulation
1668, Sales for
Resale.
You can verify the validity of a seller’s permit by calling the CDTFA’s Seller’s Permit Verification service at 1-888-225-5263
or by visiting the CDTFA website at www.cdtfa.ca.gov.
Line 5. Nontaxable Sales of Food Products
Enter your nontaxable sales of food products sold for human consumption.
Whether food product sales are taxable depends on many conditions, including who makes the sale, where the sale
occurs, who the customer is, and what is sold. For example, the following sales are generally taxable and should not be
deducted:
• Sales of alcoholic and carbonated beverages
• Sales of hot prepared food products
• Sales of meals or food sold for consumption at your place of business or sold for consumption in a place where
admission is charged
For more information on food sales, see
Regulation
1602, Food Products, or
Regulation
1603, Taxable Sales of Food
Products. Vending machine operators should see
Regulation
1574, Vending Machine Operators.
Line 6. Nontaxable Labor (repair and installation)
Enter labor charges for installing premanufactured property or for repairing or reconditioning property to restore it to its
original use.
Note: Labor charges for making or fabricating a new product (such as labor charges for making a ring or furniture),
or for assembling a product, are generally taxable and should not be deducted. Tax applies even if your customer
provides the property that you fabricate.
(Regulation
1546, Installing, Repairing, Reconditioning in General, and
publication
108, Labor Charges.)
Line 7. Sales to the United States Government
Enter sales made to:
• The United States government or its unincorporated agencies and instrumentalities, such as the following federal
departments: Treasury, Interior, Agriculture, or Defense
• Any incorporated agency or instrumentality of the United States wholly owned by either the United States or by a
corporation wholly owned by the United States
• The American Red Cross, its chapters and branches
• Federal reserve banks, federal credit unions, federal land banks, and federal home loan banks
Note: Sales made to the State of California or to cities and counties and local governments in the state are generally
taxable and should not be deducted. They are treated like any other sale.
(Regulation
1614, Sales to the United States
and its Instrumentalities, or
102, Sales to the U.S. Government.)
publication
Line 8. Sales in Interstate or Foreign Commerce
Enter sales that are exempt from tax as interstate or foreign commerce (sales involving shipments or deliveries from
California to points outside this state).
For a sale to be exempt, the sales agreement or contract must require the property to be shipped to an out-of-state
point, and you must either:
• Use your company vehicle (or other conveyance operated by your business) to ship the property to that location, or
• Deliver the property to a carrier, customs broker, or forwarding agent for shipment outside this state.
(Regulation
1620,
Interstate and Foreign Commerce, or
publication
101, Sales Delivered Outside California.)
3
CDTFA-401-GSIN REV. 14 (7-18)
Line 9. Sales Tax (if any) Included on Line 1
Enter an amount on this line only if the amount you reported on line 1 includes California sales or use taxes. Enter only
the tax amounts that are included on line 1.
(Regulation
1700, Reimbursement for Sales Tax.)
Line 10. Other Deductions
Each deduction must be clearly explained.
You may be entitled to claim other deductions in addition to those allowed on lines 4 through 9. Enter the amount for
those deductions here.
Examples of transactions that may be deductible include the following:
• Sales of Medicinal Cannabis. The exemption only applies to retail sales on or after November 9, 2016, of medicinal
cannabis, medicinal cannabis concentrate, edible medicinal cannabis products, or topical cannabis as those
terms are defined in Business and Professions Code section 26001. To obtain the exemption, qualified patients or
their primary caregiver need to provide their valid Medical Marijuana Identification Card issued by the California
Department of Public Health, under section 11362.71 of the Health and Safety Code, and a valid government issued
identification card at the time of purchase.
• Sales by pharmacists of prescription medicines for use by humans.
(Regulation
1591, Medicines and Medical Devices.)
• Transportation charges for delivering goods to a purchaser by an independent carrier (the transportation charges must be
separately stated on the invoice). If you charge more for delivery than your actual costs, the added amount is subject to tax
and cannot be deducted.
(Regulation
1628, Transportation Charges, or
publication
100, Shipping and Delivery Charges.)
• Sales of animals, seeds, plants and fertilizer, used as, or used to produce, food for human consumption.
(Regulation
1587, Animal Life, Feed, Drugs and Medicines, and
Regulation
1588, Seeds, Plants and Fertilizers.)
For more information, request a copy of
publication
61, Sales and Use Taxes: Exemptions and Exclusions.
Section B. Current Period Tax Recoveries and Deductions
If you have tax recovery deductions or adjustments prior to the period covered by your return, you will be
required to complete CTDFA-531-Q to claim those credits.
Line 1. Bad Debt Losses on Taxable Sales
Enter bad debt losses, as described below.
If you have reported a taxable sale and have been unable to collect payment for the sale, you may take a deduction for
the taxable sales portion of the bad debt.
Bad debts may take the form of:
• Checks that have been returned to you unpaid by the purchaser’s bank and which you have determined to be
uncollectible, or
• Amounts from charge or credit sales that you have determined to be uncollectible.
The bad debts must be charged off for income tax purposes or, if you are not required to file income tax returns, the bad
debts must be charged off in accordance with generally accepted accounting principles.
Enter only the amount of the sale before tax. For example, if you sold merchandise for $15 plus sales tax and were
unable to collect any amount for the sale, you would claim $15 as a deduction.
If you claim a bad debt deduction and later recover a payment, you must report the payment on the tax return filed for
the period in which the recovery payment was made.
(Regulation
1642, Bad Debts.)
Line 2. Cost of Tax-Paid Purchases Resold Prior to Use
Claiming cost of tax-paid purchases resold prior to use (excludes motor vehicle fuel and/or diesel fuel). You may claim a
deduction on this line if you:
• Paid California sales or use tax when purchasing goods or merchandise and
• Sold the property without first using it (other than retaining, demonstrating, or displaying it while holding it for sale in
the regular course of business).
Enter only the amount of the purchase price before tax. For example, if the property was sold to you for $15 plus tax, you
would claim only $15 as a deduction.
(Regulation
1701, Tax-Paid Purchases Resold.)
4
CDTFA-401-GSIN REV. 14 (7-18)
Claiming Cost of Tax-Paid Purchase Resold Prior to Use for Motor Vehicle Fuel and Diesel.
Tax recoveries reported in Section B where original transactions were eligible for a partial state tax exemption on MVF in
Section D.
In order to recover only the partial state tax rate originally paid, you must make an adjustment to Section D, if any tax
recovery deductions were reported in Section B where the original transaction was eligible for the partial state tax rate
exemption listed in Section D.
If no adjustment is made, tax will be recovered at the current higher state tax rate and your return will be underpaid.
Section D, Line 1 — Transactions from the current filing period
• If you have current tax recoveries eligible for a partial state exemption on MVF to report, subtract those tax recoveries
from your current partial state exemption on MVF transactions and enter the net amount in Section D, line 1.
Schedule Q – Transactions from a prior period
• To make an adjustment for tax recoveries eligible for a partial state exemption on MVF where the original transaction
occurred during a prior period, please complete CDTFA-531-Q, Schedule Q – Tax Recovery, and make no adjustment
to Section D, line 1.
Tax Recoveries Reported as Subjected to the Additional State Tax on Diesel Sales on Line 13b
In order to recover the additional state tax rate originally paid, you must make an adjustment to the diesel sales measure
on line 13b, if any tax recovery deductions were reported in Section B where the original transaction was subjected to
the additional state tax rate on diesel fuel.
If no adjustment is made, tax will be recovered at the current lower state tax rate and your return will be overpaid.
Line 13b – Transactions from the current filing period
• If you have current tax recoveries subjected to the additional state tax on diesel fuel to report, subtract those tax
recoveries from your current diesel sales transactions and enter the net amount on line 13b.
Schedule Q – Transactions from a prior period
• To make an adjustment for tax recoveries subjected to the additional state tax on diesel fuel where the original
transaction occurred during a prior period, please complete CDTFA-531-Q, Schedule Q – Tax Recovery, and make no
adjustment to line 13b.
Line 3. Returned Taxable Merchandise
Enter amounts you credited or refunded to customers for returned taxable merchandise, as described below. You can
take this deduction only if:
• You returned or credited to your customer the full sales price, including sales tax charges, and
• The customer, in order to obtain the refund or credit, is not required to purchase other property at a price greater than
the amount charged for the property returned.
Claim only the amount of the sale before tax. For example, if the returned merchandise had been sold for $15 plus sales
1655, Returns, Defects and Replacements.)
tax, you would claim only $15 as a deduction.
(Regulation
Line 4. Cash Discounts on Taxable Sales
If you gave a cash discount to a customer on a taxable sale, enter the amount of the discount here. You can claim
a deduction on this line only if you reported the full (undiscounted) selling price on line 1. Do not use this line if you
reported the discounted selling price on line 1 of this return or a previous return. In addition, you must ensure that you
do not collect from your customer more tax than the amount due on the discounted price. If you collect more than the
amount due on the discounted price, you cannot claim this deduction.
(Regulation
1671, Trading Stamps and Related
Promotional Plans, and
1700, Reimbursement for Sales Tax.)
Regulation
Section C. Current Period Partial Tax Exemptions
Exemption Certificate Requirements
Retailers who wish to claim a partial exemption must obtain from purchasers a timely, valid exemption certificate as
described in
Regulation
1667, Exemption Certificates. The CDTFA has designed a specific certificate for this purpose
entitled, Certificate of Partial Exemption. The certificate is available on the CDTFA website at
www.cdtfa.ca.gov
or by calling
the CDTFA Customer Service Center at 1-800-400-7115 (TTY:711). Retailers must retain the completed certificate for a
period of not less than four years.
5