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California sales tax notices

Got a letter from the California Department of Tax and Fee Administration (CDTFA)? Find it below to see what it means, why businesses usually receive it, and what to do next.

Sources checked

Tax authority

California Department of Tax and Fee Administration (CDTFA) (opens in a new tab)

Official notice guide (opens in a new tab)

Disagree with a notice?

File a petition for redetermination (Form CDTFA-416 or online) after a Notice of Determination is issued. It must be in writing, identify the disputed amount, state the grounds, and be signed. You may ask for an appeals conference. If you miss the deadline, you can pay and file a claim for refund instead.

Deadline: Generally 30 days from the date the Notice of Determination was mailed (10 days for a Notice of Jeopardy Determination).

Source: California Department of Tax and Fee Administration (CDTFA) (opens in a new tab)

Failure to file

The authority has no return on record for a period it expects one, often because an account is open but filings stopped.

Failure to fileCDTFA-431-XXX

Notice of Delinquency

CDTFA has not received one or more returns for the account and periods listed. A payment alone does not count as filing.

Why you got it

  • A sales and use tax return was not filed for a period
  • A payment was made but no return was filed

What to do

  1. Check the periods listed against your records; a payment alone does not count as a filed return
  2. File a return for each delinquent period, even if you had zero sales, and pay the tax due or request a payment plan
  3. If you were late for reasonable cause, request penalty relief online or with CDTFA-735; interest on late payments generally still applies
  4. If you are no longer in business, close the permit through online services

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Source: Letters or Notices Received (opens in a new tab)

Failure to fileCDTFA-846

Notice of Proposed Liability

CDTFA did not receive a return for the period listed and created a liability for that period.

Why you got it

  • No return was filed for the account and period on the letter

What to do

  1. Check whether a return was already filed for the period listed
  2. If not, file the return as soon as possible so the liability reflects your actual figures
  3. Pay the tax due, or request a payment plan if you cannot pay in full
  4. Consider requesting penalty relief online or with CDTFA-735 if the delay had reasonable cause

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Source: Letters or Notices Received (opens in a new tab)

Balance due

A bill for tax, penalty, or interest the authority says is unpaid.

Balance dueCDTFA-1210-DEM

Demand for Immediate Payment

CDTFA records show an outstanding balance on your account. Interest continues to accrue until it is paid in full.

Why you got it

  • An unpaid balance of tax, fees, penalties, or interest remains on the account

What to do

  1. Check the balance against your returns and payments, noting how much is tax, penalty and interest
  2. Pay the tax promptly, or request a payment plan online or through your local office, since interest keeps accruing
  3. If the balance includes late penalties and you had reasonable cause, request relief online or with CDTFA-735. If you already paid them, also file a claim for refund (CDTFA-101) within the refund deadline, which is the latest of three years after the return due date, six months after payment, or six months after a determination becomes final

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Source: Letters or Notices Received (opens in a new tab)

Assessment

A proposed or final determination of tax owed, sometimes estimated when returns were never filed.

AssessmentCDTFA-1210-XX

Notice of Determination

A billing for tax, penalty, and accrued interest that CDTFA has determined you owe, often after an audit. It becomes final if you do not file a timely petition for redetermination.

Why you got it

  • An audit found underpaid tax
  • CDTFA otherwise determined you owe additional tax

What to do

  1. Compare the determination with your records or audit findings and note the petition deadline
  2. If you disagree, file a petition for redetermination before the deadline, and consider paying the undisputed tax since interest keeps accruing
  3. If you agree with the tax, pay it and ask for relief from any late-filing or late-payment penalty online or with CDTFA-735 if you had reasonable cause

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Response window: Generally 30 days from the date the notice was mailed to file a petition for redetermination.

Source: Publication 17, Appeals Procedures: Sales and Use Taxes and Special Taxes and Fees (opens in a new tab)

Registration

Changes to your permit or account: required registration, filing-frequency changes, revocation, or closure.

RegistrationCDTFA-1293

Notice of Pending Account Closure

CDTFA plans to close your permit, license, or account because you have not reported recent sales or qualifying business activity.

Why you got it

  • Returns showed no recent sales or purchases
  • No qualifying business activity for the account

What to do

  1. To keep the account, respond online using Respond to a Letter/Inquiry with the Letter ID and date
  2. If you had sales, file or amend the return
  3. If you no longer need the permit, no action is needed

Source: Letters or Notices Received (opens in a new tab)

Collections

Enforcement on unpaid balances, such as liens, levies, warrants, or referral to a collection agency.

CollectionsCDTFA-425-LA

Notice of Levy

Tells you that CDTFA has sent a levy to a financial institution or other party to collect your outstanding balance.

Why you got it

  • An outstanding amount due remained unpaid

What to do

  1. Contact the levying officer listed at the bottom of the first page right away
  2. Arrange payment of the outstanding balance or a payment plan
  3. You can still request penalty relief separately, online or with CDTFA-735, if the late filing or payment had reasonable cause

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Source: Letters or Notices Received (opens in a new tab)

Ask for penalty relief

Penalties on a California notice aren't always final. You can ask for them to be waived. Follow the steps below, including anything the state requires you to file or pay before it reviews the request.

Request for Relief from Penalty, Collection Cost Recovery Fee, and/or Interest

CDTFA-735
  1. File the return and pay the tax or fee due first; CDTFA may not process the request until the tax is paid in full
  2. Log in to CDTFA Online Services and choose Submit a Relief Request under I Want To, or send Form CDTFA-735 if you have no login
  3. Explain, under penalty of perjury, why the late filing or payment was due to reasonable cause and circumstances beyond your control
  4. If you already paid the amounts you want relieved, also file a Claim for Refund (CDTFA-101). The deadline is the latest of three years after the return due date, six months after each payment, or six months after a determination becomes final

What qualifies: Reasonable cause and circumstances beyond your control (and separate relief for disaster victims)

Interest: Interest can be relieved only if the failure to pay was caused by an unreasonable error or delay by a CDTFA employee (or a state agency collecting the tax for CDTFA), or in disaster cases. If a penalty is relieved, interest on the late payment is still due.

Source: Online Services — Request Relief (opens in a new tab)

Before you respond

  • Check the date on the notice. Response windows usually run from that date, not the day you open it.
  • Match the account number and filing period to your own records before paying or disputing.
  • If returns are missing, filing the actual returns usually replaces an estimated bill. Confirm how on the notice or with the authority.
  • Ask about penalty relief before paying penalties, and check what must be paid with the request. See how
  • Keep a copy of the notice and everything you send back.

This page is general information, not tax or legal advice. Notice names and procedures change, so always follow the instructions on your notice and the official sources linked above.

Need the rates, nexus thresholds and filing rules? Read the California sales tax guide.

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