Publication 74, Closing Out Your Account

The California Department of Tax and Fee Administration (CDTFA) requires businesses to close out permits, licenses, and accounts when they stop operating, sell their business, change ownership, or no longer engage in taxable activities. Failure to notify CDTFA can result in liability for taxes and penalties, as we may hold you liable as a predecessor for taxes, fees, surcharges, assessments, interest, and penalties incurred by a successor entity even though you no longer own or operate the business.

When should you close out your account

You should request to close out your permits, licenses, and accounts when any one of the following occurs:

  • You are no longer actively engaged in business.
  • You no longer sell prepaid mobile telephony services.
  • You qualify as a small seller of prepaid mobile telephony services, and you decide not to voluntarily collect the local charge from your customers on and after January 1, 2017.
  • You sell your business or stock of goods to someone else.
  • You change the type or form of ownership for your business (for example, from a sole proprietorship to a corporation or partnership).
  • You add a new partner, or a partner leaves the business, and your partnership agreement calls for dissolution of the partnership and the formation of a new partnership when a change in partners occurs.

What do I need to do to close out my account

This publication covers the following topics related to closing out your account:

  • Notifying CDTFA (via Online Services or by completing CDTFA-65) with details such as closure date, reason, inventory disposition, and updated contact information.
  • Filing final returns and paying all outstanding taxes, fees, and penalties, including reporting sales of fixtures, equipment, and retained inventory.
  • Handling taxable sales after closure, which may still require reporting if sales occur within certain timeframes.
  • Understanding a successor's liability, where buyers can be held responsible for a seller's unpaid taxes unless a tax clearance certificate is obtained.
  • Managing ownership changes, which often require new accounts and may involve taxable transfers.

Please note that you must keep records for four years after closure of your account.

If you need help

If you need assistance with topics in this guide, call our Customer Service Center at 1-800-400-7115 (TTY:711) or chat with us. Customer service representatives are available to assist you Monday through Friday from 7:30 a.m. to 5:00 p.m. (Pacific time), except state holidays. You may also email us.

Revision April 2026