- Who is required to pay taxes by EFT?
- Can I participate on a voluntary basis?
- Will I be assessed a penalty for sending in my payment by check?
- What is the difference between ACH Debit and ACH Credit?
- Will I need special equipment or software to make my payments by EFT?
- Will I receive instructions on how to make my tax payments?
- What is the most common payment method?
- Can I make an EFT payment over the Internet if I use the ACH credit payment method?
- Can I change my EFT payment method?
- What do I need to do if I change financial institutions?
- What if I do not owe any taxes for the period?
- What if my tax due date falls on a weekend or holiday?
- Will I still have to file my prepayment forms?
- Will I still be required to file my sales and use tax return?
- Can I e-file my return?
- What if I need to file an amended return?
- What is a Company Identification Number?
- Do you have an ACH Debit block on your bank account?
- What types of payments can I make by EFT?
- Can the Board of Equalization withdraw funds from my account without my knowledge or permission?
- What if I have a problem when making a payment by EFT?
- Who is required to pay taxes by EFT?
Effective July 19, 2005 with the passage of Assembly Bill (AB) 139 and beginning with payments due after January 1, 2006, the Board of Equalization requires all holders of sales and use tax permits whose average monthly tax payments (over a 12 month period) equal or exceed $10,000, to participate in the EFT program.
If you meet this requirement, you must register with the Board and tell us which method you wish to use. Questions #4 and #6 below give you more information on the methods and on how to register.
- Can I participate on a voluntary basis?
Yes. If you are not required to make sales and use tax payment through EFT, you can choose to do so on a voluntary basis.
- Will I be assessed a penalty for sending in my payment by check?
Yes. If you are required to remit payments through EFT and you use another means (check, cash, credit card, etc.), you will be subject to a penalty. Quarterly and monthly tax return payments will be assessed a ten (10) percent penalty, based on the amount paid by another means. Prepayments will be assessed a six (6) percent penalty.
- What is the difference between ACH debit and ACH credit?
ACH Debit - you call a toll free telephone number, use the PC software, or use the Internet and provide specific information which authorizes the State to debit your account and credit the State's bank account. These transactions are simple and there is no cost to you, unless your financial institution charges a fee for the actual transfer of funds. Note: If you choose the ACH Debit method, you may contact the data collection service by telephone or through the Internet to "warehouse" your payment. Warehousing your payment allows you to designate any banking day (up to sixty (60) days in advance, but no later than one banking day following the due date of the EFT payment) as the "debit date". The debit date is the date your payment transfers from your bank account to the Board's bank account.
ACH Credit - you instruct your financial institution to debit your account and credit the State's bank account. For this type of transaction you must ensure your financial institution has the ability to send ACH credit transactions in the required format. There are normally set-up and transaction fees for which you are responsible.
- Will I need special equipment or software to make my payments by EFT?
ACH Debit - to make payments by telephone, no special equipment is needed. To make payments using a PC you must contact our data collection service to obtain the necessary software, minimum requirements, installation instructions and access numbers. To make online payments, you must have Internet access.
ACH Credit - there may be special hardware and software requirements. Contact your financial institution for any requirements.
- Will I receive instructions on how to make my tax payments?
Yes. After we have received and reviewed the completed Authorization Agreement for Electronic Funds Transfer form (BOE-555-EFT) we will send you a letter confirming your EFT start date. We will also provide detailed instructions on how to report your payment.
If you wish to expedite the EFT Registration process, fax your completed form to 916-322-8457, ATTN: EFT Group. Be sure to provide us with your area code and fax number so we may send you your confirmation letter and detailed instructions.
- What is the most common payment method?
The ACH debit is the most common payment method. The ACH debit method is simple, there is no additional cost, it requires no additional programming or special equipment, has a very low error rate, offers the warehousing option, and the Board is able to assist you if an error has occurred and it is necessary to trace a payment.
- Can I make an EFT payment over the Internet if I use the ACH credit payment method?
No. Internet payments are limited to taxpayers using the ACH debit payment method.
- Can I change my EFT payment method?
Yes, changing payment methods is easy. You must notify us of the change by completing a new Authorization Agreement for Electronic Funds Transfer form (BOE-555-EFT). Once we have been notified of the change, we will send you a confirmation letter and complete instructions on how to report your payment. It takes approximately 48 hours for the change to become effective.
- What do I need to do if I change financial institutions?
ACH Debit - you must submit a new Authorization Agreement for Electronic Funds Transfer form (BOE-555-EFT) with the new information.
ACH Credit - you do not need to notify us of the change. However, it will be necessary to contact your new financial institution to verify its ability to originate an ACH credit transaction in the required record formats.
- What if I do not owe any taxes for the period?
If you use the ACH debit method for making payments and owe no taxes for the reporting period, you are still required to initiate an EFT payment and report a zero dollar amount.
If you use the ACH credit method for making payments and owe no taxes for the reporting period, you must still contact your financial institution and have them make a zero dollar transaction.
- What if my tax due date falls on a weekend or holiday?
If a tax due date falls on a weekend or holiday (national
or State of California), the payment is due on the first business day following
the weekend or holiday. For example, if the tax due date is January 31
and that date falls on a Saturday, the tax due date will become Monday, February
2 and the funds must settle into the Board's bank account by February 3.
- Will I still have to file my prepayment forms?
No. If you file on a prepayment basis (i.e. two monthly prepayment forms and one quarterly return), you will no longer receive or be required to mail the two prepayment forms. You are only required to pay the prepayments through EFT. Please do not create or file any paper prepayment forms. Receipt of prepayment forms result in unnecessary processing and may create a false liability.
- Will I still be required to file my sales and use tax return?
Yes. Whether you choose the ACH debit or ACH credit method, you must continue to file your tax returns on a timely basis. The reporting due dates and filing requirements have not changed. Your tax return will be considered timely if it is postmarked on or before the due date. If your tax return is not filed on a timely basis, even though the EFT payment may have been paid timely, you will be subject to a 10 percent penalty on the amount of tax that was due with the return.
- Can I e-file my return?
Yes, if you are a single-outlet retailer you are currently eligible to e-file. Your tax return will be considered timely if the return’s effective date is on or before the due date. If your tax return is not e-filed on a timely basis, even though the EFT payment may have been paid timely, you will be subject to a 10 percent penalty on the amount of tax that was due with the return.
- What if I need to file an amended return?
If you need to file an amended return, you must mail or fax in the actual amended return. Any payments that apply to the amended return may be made by EFT, but are not required to be paid by EFT.
- What is a Company Identification Number?
The Company Identification Number is a 10-digit number used to identify an originator of the transaction. The Board of Equalization’s Sales and Use Tax Company Identification Number is 1282531033.
- Do you have an ACH Debit block on your bank account?
If you have selected to pay by ACH Debit and have an ACH Debit block on your bank account, you must inform your financial institution of the BOE’s Company Identification number (1282531033) to avoid your sales and use tax payment from being rejected.
- What types of payments can I make by EFT?
The following types of payment may be made by EFT:
- 04101 - Sales and Use Tax Prepayment #1
- 04102 - Sales and Use Tax Prepayment #2
- 04100 - Sales and Use Tax Return Payment
- 05600 - Prepayment of Sales Tax on Fuel Distribution
Do not make EFT payments on Board assessments notifying you to pay delinquent taxes and/or penalty and interest charges. Those payments cannot be made by EFT. They must be made by cash, cashier's check, check or money order.
- Can the Board of Equalization withdraw funds from my account without my knowledge or permission?
No. ACH debit payments can only be initiated by you or your authorized personnel by using your seller's permit number along with the unique security code that you have chosen. ACH credit payments are initiated only by you through your financial institution.
- What if I have a problem when making a payment by EFT?
If you experience any problems making an EFT payment, you may call the Board's EFT Helpline at 916-327-4229 between 7:30 a.m. and 4:30 p.m. (Pacific time), Monday through Friday. A representative will be happy to assist you.
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