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What are sales and use tax prepayments?

The CDTFA assigns your filing frequency—quarterly prepayment, quarterly, monthly, fiscal yearly, or yearly—based on the sales tax you report or the taxable sales you expect when you register. If you are placed on a quarterly prepayment schedule, you must make sales and use tax prepayments for the first two months of each quarter before filing your quarterly return.

If your estimated tax liability averages $17,000 or more per month and we notify you of the requirement, you will be placed on a quarterly prepayment filing basis under Revenue and Taxation Code sections 6471.

What are the due dates for prepayments and returns?

Each quarter you are required to make your prepayments and file your quarterly return on or before the due dates listed below. Your prepayment or return will be available online on the first day of the month following the reporting period.

1st Quarter (January-March):

January prepayment due starting February 1 and no later than February 24
February prepayment due starting March 1 and no later than March 24
Quarterly return for January 1 through March 31 is due starting April 1 and no later than April 30

2nd Quarter (April-June):

April prepayment due starting May 1 and no later than May 24
May 1 through June 15 prepayment due starting June 1 and no later than June 24
Quarterly return for April 1 through June 30 is due starting July 1 and no later than July 31

3rd Quarter (July-September):

July prepayment due starting August 1 and no later than August 24
August prepayment due starting September 1 and no later than September 24
Quarterly return for July 1 through September 30 is due starting October 1 and no later than October 31

4th Quarter (October-December):

October prepayment due starting November 1 and no later than November 24
November prepayment due starting December 1 and no later than December 24
Quarterly return for October 1 through December 31 is due starting January 1 and no later than January 31

Weekend or State Holidays

If the due date falls on a weekend or state holiday, the due date is extended to the next business day.

How much do I prepay?

Calculating Prepayments for the 1st, 3rd, and 4th Quarters:

You are required to prepay at least 90 percent (90%) of the state and local tax liability for the period you are filing.

For example, if you are making a prepayment for the month of January that had a tax liability of $30,000, then you will make a prepayment of $27,000 ($30,000 x 0.90) starting February 1 and no later than February 24. If you prefer, you may pay one hundred percent (100%) of the tax liability.

Calculating 2nd Quarter Prepayments:

The first prepayment for the filing period of April should be made starting May 1 and no later than May 24 and must be at least 90 percent (90%) of the tax liability for April.

For example, if you had a tax liability of $25,000 for the month of April, then you would make a prepayment of $22,500 ($25,000 x 0.90).

The second prepayment covers the filing period May 1 through June 15 and should be made no later than June 24. The prepayment must be calculated using either option 1 or 2 below.
Option 1: Pay at least 90 percent (90%) of the state and local tax liability for this 45-day period.

For example, if you had a tax liability of $35,000 for May 1 through June 15, then you would make a prepayment of $31,500 ($35,000 x 0.90).

Option 2: Pay 135 percent (135%) of the state and local tax liability for May.

For example, if you had a tax liability of $22,000 for the month of May, then you would make a prepayment of $29,700 ($22,000 x 1.35).

What if I don't have taxable transactions?

In the rare instance taxable transactions did not occur during either the first or second months of the quarter, a prepayment is not required for that month. An explanation why taxable transactions did not occur may be requested since most businesses have recurring monthly taxable sales.

What if I don't make my required prepayments?

Failure to make either of the required prepayments prior to filing a timely quarterly return and payment may result in a 6 percent (6%) penalty based on 90 percent (90%) of the tax liability for each prepayment not received.

How do I make a prepayment?

For more information on how to make a prepay payment, please visit our Online Services Make a Payment page.

Online Services Return Prepayments