Interest, Penalties, and Collection Cost Recovery Fee
Interest, Penalties, and
Collection Cost Recovery Fee
PREFACE
This publication is intended to answer many of the questions asked about when and how interest charges, penalty
charges, and the collection cost recovery fee (CRF) may apply. We provide examples of common situations where these
charges apply and information about how these charges can be waived. This publication may not cover all scenarios
related to all interest, penalties, and CRF that we administer.
We administer California¡¯s sales and use, fuel, tobacco, alcohol, and cannabis taxes, as well as a variety of other tax and fee
programs. The taxes and fees we collect support local essential services such as transportation, public safety and health,
libraries, schools, social services, and natural resource management programs through the distribution of tax dollars
going directly to local communities.
If you need additional information, please visit our website at cdtfa., or call our Customer Service Center at
1-800-400-7115 (CRS:711). Customer service representatives are available Monday through Friday from 7:30 a.m. to 5:00 p.m.
(Pacific time), except state holidays.
We welcome your suggestions for improving this or any California Department of Tax and Fee Administration (CDTFA)
publication. Please send your suggestions to:
Audit and Information Section, MIC:44
California Department of Tax and Fee Administration
PO Box 942879
Sacramento, CA 94279-0044
Please note: This publication summarizes the law and applicable regulations in effect when the publication was written, as
noted on the cover. However, changes in the law or in regulations may have occurred since that time. If there is a conflict
between the text in this publication and the law, decisions will be based on the law and not on this publication.
CONTENTS
Section
Page
Overview
1
When Do Interest, Penalty, and the Collection Cost
Recovery Fee Charges Apply?
2
How Do Interest, Penalty, and the Collection Cost
Recovery Fee Charges Apply?
12
Relief from Interest, Penalties, and the Collection
Cost Recovery Fee
13
Interest on Refunds and Credits
16
For More Information
17
OVERVIEW
Situations that can result in interest and penalty charges
The reasons for interest and penalty charges vary. For example, you may be assessed interest and penalty charges if you:
? File a late return and/or make a late payment.
? Do not include a payment or a sufficient payment with your balance-due return.
? Do not report tax on a taxable transaction.
? Calculate tax at the incorrect rate.
? Do not file a return.
? Operate a business without the required CDTFA-issued permits or licenses.
? Misuse a resale or exemption certificate.
? Make sales without a valid permit.
? Knowingly collect sales tax reimbursement or use tax (tax) and fail to remit the tax to us.
These and other examples are discussed in more detail on the following pages.
Collection Cost Recovery Fee
We are required by law to impose a Collection Cost Recovery Fee (CRF) on past due liabilities. The CRF is intended to cover
costs incurred while obtaining payment of past due amounts and it applies to most tax and fee programs administered by us.
APRIL 2022 | INTEREST, PENALTIES, AND COLLECTION COST RECOVERY FEE
1
WHEN DO INTEREST, PENALTY, AND COLLECTION COST RECOVERY
FEE CHARGES APPLY?ection Cost Recovery Fee on past due amounts
Late filing or payment
File a return. You must file your tax return and pay the tax by the due date. If the due date falls on a Saturday, Sunday, or
legal holiday, your return and payment will be considered timely if you file a return and pay the tax the next business day.
Additional information on filing is available in publication 439, Online Services.
Mailed returns or payments. To be timely, tax returns and payments mailed to us must be postmarked on or before the
due date. If the due date falls on a Saturday, Sunday, or legal holiday, returns postmarked by the next business day are
considered on time.
Please note: If you use a commercial delivery service rather than the U.S. Postal Service, you will need to retain proof of
when the return or payment was sent.
Credit card payments. Your credit card payment must be completed before midnight (Pacific time) on the due date for the
reporting period to be considered timely. Please note: If your account requires payment by Electronic Funds Transfer (EFT),
you will incur a penalty if you pay by credit or debit card. These are not considered acceptable methods of EFT payment.
Electronic funds transfer (EFT) payments. If you pay your taxes by EFT, your payment must settle into our bank account
by the first banking day following the tax due date. Depending on what method you use, there is a cutoff for making a
timely payment.
? ACH Debit ¨C If you submit your payment online directly through CDTFA, you must complete your transaction by the
due date. If you pay online on the due date, your transaction must be completed by 3:00 p.m. (Pacific time), to ensure
your funds settle into the state¡¯s bank account by the next banking day.
? Third Party Vendor ¨C If you submit your payment through the state¡¯s third-party payment processor, First Data, and
it is the due date, you must complete your transaction by 3:00 p.m. (Pacific time), and select the next banking day as
your debit date.
? ACH Credit ¨C You must contact your financial institution to determine when to initiate your payment so that your
payment settles into the state¡¯s bank account no later than the first banking day following the due date.
Charges that will apply to late tax return filings and late payments
Please note: The following information does not apply to late prepayments.
Penalties. You are subject to:
? A 10 percent penalty if you do not file your tax return by its due date.
? A 10 percent penalty if your tax payment is late.
If you file a late return and make a late payment, your penalty will not exceed 10 percent of the amount of tax due for the
reporting period. See next page for exceptions.
Example: You have a tax amount due of $1,000 for the reporting period. You file a late return and make a late tax
payment. As noted above, a 10 percent penalty applies for the late payment and the late return filing. In this example,
the total penalty amount is limited to $100 (10 percent of your total tax amount due).
2
INTEREST, PENALTIES, AND COLLECTION COST RECOVERY FEE | APRIL 2022
................
................
In order to avoid copyright disputes, this page is only a partial summary.
To fulfill the demand for quickly locating and searching documents.
It is intelligent file search solution for home and business.
Related download
Related searches
- debt management and collection services
- no cost no fee refinance
- credit and collection policy template
- department management and collection system
- debt management and collection system
- nationwide credit and collection inc
- direct and indirect cost analysis
- direct and indirect cost accounting
- direct and indirect cost examples
- interest expense and interest payable
- food and beverage cost control 6th edition
- food and beverage cost control