Filing your Sales and Use Taxes: Sales and Purchase Information

Sales and Purchase Information

Total Gross Sales

Calculate your total taxable and nontaxable sales for the reporting period, including lease and rental receipts.

  • Report all sales (in any manner) related to California business. You will deduct nontaxable transactions on the Deduction Page.
  • Include all charges related to your sales, such as labor, service, and shipping and handling charges.
  • Your “total gross sales” may include amounts for California sales or use taxes. If this is the case, be sure to deduct those tax amounts on Deduction Page. If you do not, you will overpay tax.

Purchases Subject to Use Tax

Calculate your total purchases that are subject to use tax, as explained below.

Your purchases of merchandise, equipment, and other tangible personal property are subject to use tax and must be reported if you

  • Purchased the property from an out-of-state retailer who did not collect California use tax, or
  • Purchased the property with a resale certificate or other exemption certificate
    And
  • Used the property in California for a purpose other than (1) resale or (2) demonstration, retention, or display while holding it for sale in the regular course of business.

You must also report your purchase of a vessel or aircraft if you (1) purchased it from an unlicensed retailer who did not charge tax on the transaction and (2) used the property for a purpose other than resale as described above.

Calculate the amount you paid for the property.

  • If you paid another state’s sales or use tax on your purchase, do not include the tax payment as part of your purchase price. You may be eligible for a credit for the other state’s tax (see Net Tax Page).
  • If you are reporting property purchased with a resale certificate, report the purchase price on the tax return for the reporting period during which you first used the property in California.
  • If you are reporting property purchased from an out-of-state retailer who did not charge you for California tax, report the purchase price on the tax return for the reporting period during which you first used the property in California.

Sales of Fixtures and Equipment

Calculate any business assets sold, such as fixtures and equipment or inventory retained.

  • If you sold any business assets, such as fixtures and equipment, during the reporting period, you must report the sale.
  • If you are closing out your seller’s permit and have sold fixtures and equipment, you should report the sales price.
  • You must also report any inventory you intend to retain for your own use or for use as a gift, that was purchased for resale without the payment of tax or tax reimbursement. Sales of inventory to another retailer or to the purchaser of your business are not taxable, but should be reported as “Sales for Resale” on the Deduction Page. A resale certificate should be obtained from the buyer and saved in your records. For more detailed information, see publication74, Closing Out Your Account.

Transactions Subject to the Additional State Tax on Diesel Sales

Effective July 1, 2011 and each July 1 through 2014, the statewide sales and use tax rate imposed on sales of diesel fuel will change. The table below shows the changes to the applicable tax rates for the specified period dates:

July 1, 2011 – June 30, 2012 July 1, 2012 – June 30, 2013 July 1, 2013 – June 30, 2014 Effective July 1, 2014
Sales and Use Tax Rate for Diesel Fuel 1.87% 2.17% 1.94% 1.75%

Calculate the amount of sales of diesel fuel under the correct period(s). The amount entered should not include any sales tax or state excise tax on diesel.

Transactions Subject to the 1% Lumber Products Assessment

Calculate your sales and purchases of lumber products or engineered wood products made on or after January 1, 2013, as explained below.

If you sell lumber products and engineered wood products you are required to charge and collect the 1% assessment on your sales of these products to purchasers who will use the products in this state.
Do not include your sales for resale of lumber or engineered wood products.

Your purchases of lumber or engineered wood products are subject to the 1% assessment if you:

  • Purchased the lumber or engineered wood products for use in California from an out-of-state retailer who did not collect the 1% assessment, or
  • Purchased the lumber or engineered wood products with a resale certificate or other certificate, and
  • Used the lumber or engineered wood products in California for a purpose other than (1) resale, or (2) demonstration, retention, or display while holding it for sale in the regular course of business.

 

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