Short answer: The CDTFA (California Department of Tax and Fee Administration) runs California's sales and use tax program. Businesses usually need help with it for one of four reasons: filing returns, catching up on missed returns, responding to an audit, or claiming a refund of overpaid tax. Tax Resolution Plus in Irvine helps with all four. Our co-founder is a former CDTFA auditor.
Tax Resolution Plus is a private firm. We are not part of, or affiliated with, the CDTFA or any government agency.
What does the CDTFA do?
The CDTFA administers California sales and use tax and many special taxes and fees. It took over these programs from the State Board of Equalization (BOE) on July 1, 2017, so some older letters and forms still mention the BOE. If your business holds a California seller's permit, the CDTFA is the agency you register with, file returns with and pay. It's also the agency that audits those returns. (CDTFA)
The CDTFA doesn't handle California income tax. That's the Franchise Tax Board. For a longer overview, read What is CDTFA?
When do California businesses need help with the CDTFA?
Most fit one of these situations:
- Routine filing. You hold a seller's permit and want returns prepared correctly and on time.
- Missed returns. One or more returns weren't filed, or the CDTFA has sent a bill based on its own estimate.
- Never registered. You should have been reporting sales or use tax but never registered with the CDTFA.
- An audit letter or call. The CDTFA has selected your business for a sales and use tax audit.
- Overpaid tax. You think you reported or paid more sales tax than you owed.
How often do you have to file CDTFA sales tax returns?
The CDTFA assigns your filing frequency when you register, based on your reported or expected taxable sales. The common frequencies are monthly, quarterly, quarterly prepay and yearly, and the CDTFA can change yours as your sales change. Your assigned frequency appears on your CDTFA account. (CDTFA)
We prepare monthly, quarterly and annual CDTFA returns. We reconcile each return to your records before filing. See California sales tax return filing.
What if you missed CDTFA returns?
Unfiled periods don't go away. Penalties and interest can add up, and the CDTFA may bill you based on its own estimate of your sales. Catching up usually works like this:
- Find every open period. We list each period with no return on your CDTFA account.
- Rebuild the numbers. We use your sales reports, point-of-sale data, bank deposits and purchase records.
- Prepare and file the late returns. We reconcile each one to your records.
- Address the balance. We review penalties and, where the facts support it, a request for penalty relief.
We help businesses catch up on late or missed CDTFA returns. Start with California sales tax return filing and catch-up help.
What is a CDTFA voluntary disclosure?
A voluntary disclosure lets certain businesses and purchasers that never registered come forward to the CDTFA on their own, before the CDTFA contacts them. According to CDTFA Publication 178, an approved request generally limits the assessment period to the prior three years, instead of the eight years that can apply when no returns were filed. The CDTFA may also waive late filing and late payment penalties. Eligibility rules apply. For example, you generally can't have been contacted by the CDTFA about the issue already. (CDTFA Publication 178)
We prepare CDTFA voluntary disclosure requests. Because eligibility depends on your facts, we review them with you first. See California use tax help.
What happens in a CDTFA sales tax audit?
A CDTFA audit checks whether you reported all your gross receipts and whether your claimed deductions are supported. According to CDTFA Publication 76, the steps usually run like this:
- First contact. It's usually a phone call, and the audit period is usually three years.
- Records review. The auditor reviews your records and often tests a sample period.
- Results. The auditor discusses the findings with you before the audit closes.
If the CDTFA issues a Notice of Determination, you generally have 30 days to pay or to file a petition for redetermination (an appeal). (CDTFA Publication 76)
Our co-founder, Shawn Zali, spent more than seven years at the CDTFA as an auditor, so he knows how auditors review records and test deductions. Read what to expect in a CDTFA sales tax audit, or see our CDTFA sales tax audit help.
Can you get a refund of overpaid California sales tax?
Yes. If your business overpaid, you can file a claim for refund with the CDTFA, as long as you file within the deadline. Overpayments often come from tax reported on sales that were exempt or were sales for resale, or from reporting errors. Claims have strict filing deadlines, so check the dates for each period early. (CDTFA)
We prepare sales tax refund claims on a contingency fee basis. See CDTFA sales tax refund claims.
Why work with a former CDTFA auditor?
Knowing how the agency reviews a return helps on every type of CDTFA matter:
- Experience inside the CDTFA. Shawn Zali, our co-founder, is a former CDTFA auditor with more than seven years at the agency.
- A team of Enrolled Agents and former state auditors. They prepare returns, disclosures, refund claims and audit responses.
- Local to Orange County. We're based in Irvine and work with California businesses. See Orange County tax relief.
Every case depends on its facts. We'll tell you what we see and which options you may qualify for.
Frequently asked questions about the CDTFA
Is the CDTFA the same as the Board of Equalization (BOE)?
Not anymore. On July 1, 2017, most BOE tax programs, including sales and use tax, moved to the newly created CDTFA. Older notices and forms may still mention the BOE.
Is the CDTFA the same as the Franchise Tax Board (FTB)?
No. The FTB handles California personal and business income tax. The CDTFA handles sales and use tax and many special taxes and fees.
Can someone represent my business with the CDTFA?
Yes. You can authorize a representative by filing CDTFA form CDTFA-392, the authorization that lets a representative act for you. They can then speak with the CDTFA about your account, audit or claim.
What should I do if I get a CDTFA audit letter?
- Note any dates in the letter.
- Gather your sales, purchase and bank records for the audit period.
- Consider getting representation before the first meeting with the auditor.
Don't ignore it. Deadlines later in the process, such as the 30-day window after a Notice of Determination, are strict.
How do your fees work?
We prepare sales tax refund claims on a contingency fee. For returns, catch-up filings, voluntary disclosures and audits, we explain fees during the free consultation, after we understand your situation.
Tell us what's going on with your CDTFA account. One of our Enrolled Agents or former state auditors will review your situation in a Free 30-minute consultation, or call (866) 900-9001.
Tax Resolution Plus Inc. is a private firm in Irvine, CA, and is not affiliated with the CDTFA.