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

This document contains official instructions for Form CDTFA-401-A, State, Local, and District Sales and Use Tax Return - a form released and collected by the California Department of Tax and Fee Administration. An up-to-date fillable Form CDTFA-401-A is available for download through this link.

Instruction Details:

  • This 11-page document is available for download in PDF;
  • Actual and applicable for the current year;
  • Complete, printable, and free.

Download your copy of the instructions by clicking the link below or browse hundreds of other forms in our library of forms released by the California Department of Tax and Fee Administration.

ADVERTISEMENT
ADVERTISEMENT

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

126 times
Rate
(4.4 / 5) 7 votes
CDTFA-401-INST REV. 22 (7-18)
STATE OF CALIFORNIA
CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION
Instructions for Completing the
CDTFA-401-A, 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 cost 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 return 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 always 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.
1
CDTFA-401-INST REV. 22 (7-18)
STATE OF CALIFORNIA
CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION
Instructions for Completing the
CDTFA-401-A, 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 cost 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 return 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 always 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.
1
CDTFA-401-INST REV. 22 (7-18)
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 on the
CDTFA website at www.cdtfa.ca.gov.
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 D 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 for California tax, report
the purchase price on the tax return for the reporting period during which you first used the property in California.
2
CDTFA-401-INST REV. 22 (7-18)
• 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
of inventory to another retailer or to the purchaser of your business are not taxable, but should be reported as “Sales
for 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 Recovery Adjustments, 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 on page 2 Sections C and D with the total being recorded in
Section D, line 4 and page 1 line 20(a). Complete CDTFA–531-Q, Schedule Q−Tax Recovery, prior period tax recovery
credits on page 1, line 20b.
You must maintain records that support all claimed deductions.
Section A. Full Deductions—Page 2
Any transaction(s) under this section must be included on line 1, Total Gross Sales on page 1.
If you have no Section B Current Period Tax Recovery Deductions/Adjustments, the total from this section will be the
total for page 1, line 11 (Total Non-Taxable Transactions Reported).
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 seller’s permits 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 order
Regulation
1574, Vending Machine Operators.
3
CDTFA-401-INST REV. 22 (7-18)
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
publication
102, Sales to the U.S. Government.)
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.)
Line 9. Sales Tax (if any) included in 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 medical
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.)
4
CDTFA-401-INST REV. 22 (7-18)
• 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 Recovery 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, Schedule Q−Tax Recovery, 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 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.)
Claiming Cost of Tax-Paid Purchases Resold Prior to Use (Motor Vehicle Fuel and/or Diesel Fuel)
• If you paid California sales or use tax on motor vehicle fuel and/or diesel fuel and you need to claim a tax recovery
deduction (that is, Cost of Tax-Paid Purchases Resold Prior to Use), please follow the detailed instructions below. You may
also visit the CDTFA Industry and Tax and Fee Guides under Tax Guide for Motor Vehicle Dealers for additional text relating
to this deduction.
To calculate your allowable Cost of Tax-Paid Purchases Resold deduction for motor vehicle fuel purchases, you will need
to know:
1. The total cost of your motor vehicle fuel purchases, and
2. Tax rate of the fuel station’s location.
5