PAYING SALES AND USE TAX - 8486

(Renumbered: 01/2021)

(Revised and renumbered from 8731, 8732)

 

Usually, sales tax and use tax is collected by California retailers and paid to the California Department of Tax and Fee Administration (CDTFA) on taxable items. When an out-of-state or online retailer does not collect the sales tax on taxable items delivered to California, the purchaser may owe use tax, which is simply a tax on the use, storage, or consumption of personal property in California.

 

This section addresses the Consumer Use Tax procedure for agency/department purchases on taxable items where sales tax is not collected. The agency/department must pay the use tax to the CDTFA.

 

Agencies/departments will identify payments subject to the consumer use tax.  Agencies/departments not using FI$Cal will enter an asterisk on the Claim Schedule STD. 218 line immediately to the right of the "Amount" column. The agency/department will enter the total net purchase price of all items in the claim subject to use tax will be entered in the box titled “Total Subject to Use Tax.” If the claim is to reimburse an agency’s/department’s revolving fund (Replenishment Claim Schedule, STD. 219TT), the asterisk will be entered after the applicable item on the calculator machine tape or spreadsheet for revolving fund invoices accompanying the claim.

 

The amount of use tax payable will not be included in the total claimed on the Claim Schedule, STD. 218. Do not increase the vendor’s invoice by the amount of the use tax due.  After scheduling the vendor payment, the agency/department will file the CDTFA-401-E, State, Local, and District, Consumer Use Tax Return, online. When scheduling a use tax payment, it is best to have the State Controller’s Office return the warrant and payment voucher to the agency/department through the special handling process. This will ensure that all necessary paperwork is attached and mailed to the CDTFA.

 

For use tax payments made through FI$Cal, the agency/department will Submit a regular FI$Cal voucher to the SCO with a special handling request for the warrant to be returned to the agency/department.  Upon receipt, the agency/department will mail the warrant and the supporting documents to CDTFA.

 

For each claim or voucher containing supplier invoices subject to the use tax, agencies/departments will complete for their files a Consumer Use Tax Return form (CDTFA-401-E) along with a spreadsheet that include the following information:

• Reporting period
• Agency/department name
• Fund code
• Title of fund
• State fiscal year
• Appropriation item number
• Claim schedule number (if applicable
• Date
• Items purchased (brief description)
• Net purchase price
• County to which the use tax is due.

Agencies/departments must identify payments subject to use tax. To do so, the agency/department will use reports that provide details of sales or use tax not collected on out of state purchases, in which the seller did not collect sales or use tax. 

 

In the event of multi-funded purchases that require use tax, the agency/department will submit a separate Consumer Use Tax form for each fund, appropriation, and reporting period. The tax amount due will not be computed by the agency/department or shown on each Consumer Use Tax Return form. The Consumer Use Tax Return form will be retained by the agency/department until a State, Local, and District Consumer Use Tax Return, CDTFA-401-E, is filed online through the CDTFA’s online filing system. 

 

Consumer Use Tax Return forms will be scheduled for payment of use tax to the California Department of Tax and Fee Administration (CDTFA) by the agency/department simultaneously with the online filing of the State, Local, and District Consumer Use Tax Return (Consumer Use Tax Return), CDTFA–401-E.  Agencies/departments not using FI$Cal should do the following:

 

• Submit a separate claim for each fund and appropriation from which payment will be made. Do not submit copies of the Consumer Use Tax Return form to the CDTFA.
• Enclose a copy of the confirmation page from the online filing of the Consumer Use Tax Return with the claim and include the payment voucher in a remittance advice envelope.
• Prepare as an additional enclosure a list of vendors, including name and address, from which frequent purchases are made, which are subject to use tax.
• Attach duplicate copies of the Consumer Use Tax Return form to the agency’s/department’s copy of the claim.
• Type or write the claim schedule (if applicable) on the copy of the Consumer Use Tax Return, CDTFA-401-E online confirmation page.

 

If more than one Claim Schedule, STD 218 is submitted to pay the total tax due, the Consumer Use Tax Return form, CDTFA-401-E, online confirmation page and payment voucher will be placed in a remittance advice envelope attached to one of the claim schedules. A special mailing request stating, “Please mail warrant in payment of our Claim Schedules numbers            ,            , and             , with the payment voucher and confirmation page accompanying claim schedule number          ," will be attached to the remittance advice envelope accompanying each of the related claim schedules. All claim schedules requesting payment of use tax due relating to the Consumer Use Tax Return form, CDTFA-401-E, will be clipped together and will have a note attached by the agency/department requesting that the Claim Schedules be kept together until audited by the State Controller’s Office.

 

Agencies/departments using FI$Cal will do the following:

Submit a regular FI$Cal voucher, which may include multi-funding along with special handling instructions to have the warrant returned to the agency/department. 

The agency/department will attach the payment voucher and the warrant and mail it to the CDTFA.