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Avalara Help Center

Set Up California Returns

This article applies to:Returns Central

Tell Us Where You Collect Tax 

Add California to the places where you collect tax. This tells AvaTax to calculate tax on California transactions. See the California Department of Tax and Fee Administration website for details about nexus, registration, and taxes in California.

California has local jurisdictions that you may need to add when you add the state. 

Before you add California, there are two things you need to do:

When you add California to where you collect tax:

  • If you're an out-of-state seller and make sales to locations within the state from a location outside of the state, set up where you collect tax depending on how you're registered. Typically, you file Schedule B of the California CDTFA State, Local, and District Sales and Use Tax Return. 
    • If you don't collect district tax and only collect the combined state rate, select the region of California and no local authorities
    • If you collect the full rate of tax for each jurisdiction you ship to, select the region of California and ALL local authorities to ensure local tax is reported on Schedule A
  • If you're a retailer with a physical location in the state of California, and:
    • only make sales from your physical location, select the region of California and all local authorities applicable to the jurisdiction of your location. Typically, you file Schedule C of the California CDTFA State, Local, and District Sales and Use Tax Return.
    • make sales from your physical location as well as ship to other jurisdictions within the state, select the region of California and ALL local authorities. Typically, you file Schedule B and Schedule C of the California CDTFA State, Local, and District Sales and Use Tax Return. 
  • If you're a retailer and perform business activities that match both 1 and 2 above, select the region of California and ALL local authorities. Typically, you file Schedule B and Schedule C of the California CDTFA State, Local, and District Sales and Use Tax Return. 

California has both sales and sellers use tax. Pick the right tax type based on the way your business is registered and the tax return you need to file.

"Sourcing" determines the location where a sale is taxed. California is a mixed-sourced state. City, county, and state sales taxes are origin-sourced, while district sales taxes (supplementary local taxes) are destination-sourced.

Add Your Company Locations 

Add any physical locations you have in California. 

When you add a location:

  • Enter the five-digit, state-assigned Outlet Number under Additional Information
  • Enter the twelve-digit, state-assigned Tax Area Code under Additional Information
    • Tax area codes aren't available on the state website anymore. You may need to reach out to a state representative to obtain the tax area code.
  • After you validate the location address, make sure it falls in the jurisdictions you expect. If not, you may want to manage your jurisdiction overrides

Outlet Number for California State

  • The outlet number is the five-digit number the state assigns to your location when you register the location with the state. Enter five digits, for example "00001".
  • The CA return can't be filed accurately without this information. 

Tax Area Code for California State

  • When a retailer obtains a seller’s permit for a place of business, a tax area code is assigned to identify the business location. Generally, the local sales tax is allocated to the assigned tax area code of the taxpayer’s registered place of business. 
  • The tax area code is a twelve-digit number. Be sure to follow the specified format when you enter this number for your location.
    ca_tax_area_code.png
  • Tax area codes can change. Stay informed about changes to your registration and update the tax area code in AvaTax if it changes.

Schedule Your Returns

After you tell us where you collect tax and add locations, you're ready to schedule returns. Go to Returns in AvaTax to provide a funding power of attorney and schedule your returns

Your company name and taxpayer ID from Your Company Details show up on your returns. Make sure they match what’s on your registration information.

Use this info to schedule your returns. Keep in mind that the selections you made when you told us where you collect tax, any location codes you entered, and the forms you select are related and should tie together.

All tax types are reported on a single California sales and use tax form, unless you're registered for consumers use tax only. Confirm your filing frequency on the registration information provided by the state.

  • Select form CDTFA-401 A2 if you don't have any in-state locations
    • Schedule B is included for businesses that aren't registered with a physical location in California. This return doesn't include Schedule C.
    • If you have a schedule G requirement, Avalara cannot support filing your California return.
    • If you have any individual transactions of $500,000 or more, submit a case to Avalara to request that Schedule H be filed with your return.
  • Select form CDTFA-401 A2 OUTLET if you have one or more in-state locations registered with the state. This return includes Schedule C.
    • Avalara reports on Schedules B and C based on your transaction origin addresses
    • Schedule B is only used if you have transactions that originate outside of California
    • If you need to submit a Schedule B, but don't have transactions that originate outside of the state, submit a case to Avalara 
    • If you have a schedule G requirement, Avalara cannot support filing your California return.
    • If you have any individual transactions of $500,000 or more, submit a case to Avalara to request that Schedule H be filed with your return.
  • Select form CDTFA-401 A2 E if you're registered to collect consumers use tax only. Sales tax isn't reported on the CDTFA-401 A2 E since a use tax only account shouldn't have sales tax.
  • Lumber Tax: Avalara does not support calculating Lumber tax, but we are able to report it.
    • To add Lumber Tax to your California filing in Returns, add the adjustment in the Tax Details and Adjustments section of your California return in AvaTax.
      • Go to Returns > Manage and Approve Returns. Find California and then select Manage Returns.
      • Find your return you want to adjust and then select Tax Details and Adjustments.
      • Select Add Adjustments and enter the Lumber Tax amount.
    • Please note that monthly prepayments do not allow this adjustment and it is only available on the quarterly, semi-annual and annual returns. 
  • Make sure you enter your California sales and use tax account number correctly. This should be a nine-digit number. Example: 123456789. If your account number is only eight-digits, add a leading zero. 
    • The sales and use tax account number shouldn't be confused with the sales and use tax registration number. If you're unsure of the account number required to file for your sales and use tax account, contact the CDTFA.
  • California will be phasing out the use of the limited access code (previously the express code). Avalara will not be able to verify account information or assist with audit or notice questions without the standard login information being provided.

Select form CA Prepayment if you're required to make monthly CA prepayments.

  • Some California taxpayers are required to make monthly prepayments. For more information on due dates for prepayments and other filing requirements, see the CDTFA website
  • California only requires the prepayment to be made for 90% of the monthly liability. Avalara defaults to 100% and pays all tax collected for the month as the prepayment.
  • The May prepayment defaults to 100%. If you want Avalara to use 135%, you will need to submit a case to request using the higher calculation for May.

Supported Filing Frequencies

  • Annual
    • Calendar Annual - Default annual setting (1/1 - 12/31)
    • Fiscal Annual - After you schedule the annual return, open a support case and tell us that a fiscal year is required along with the dates (for example, 7/1 - 6/30)
  • Quarterly
    • Period end dates (3/31, 6/30, 9/30, 12/31)
  • Quarterly with Monthly Prepayments
    • CA Prepayment is filed in conjunction with the quarterly state return

Avalara doesn't support filing the state return on a monthly basis. Monthly filers must file in house. If you're a monthly filer and would like Avalara to file on your behalf, contact the CDTFA (1-800-400-7115) and request a supported filing frequency (Annual, Quarterly, or Quarterly with Monthly Prepayments).

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