California Introduces Reforms to Sales Tax Penalties

California Senate Bill 1528 introduced several administrative changes to sales tax and fee laws managed by the California Department of Tax and Fee Administration (CDTFA). These updates include adjustments to the handling of notices and penalties for sales and use tax. Notably, the bill allows CDTFA to electronically serve notices of determination and jeopardy determinations when certain conditions are met. It also revises the exemption on unremitted tax thresholds for penalties to a) $1,500 per month or b) 25% of the tax liability amount for the period in which the tax was due, whichever is more.

Additionally, the bill waives prepayment requirements for used car dealers who primarily deal in motor vehicles. Other provisions focus on streamlining the filing process for alcoholic beverage tax reports and limiting penalties under the Hazardous Substances Tax Law. These changes are intended to improve sales tax administration and enhance efficiency, with an effective date of January 1, 2025. (California Senate Bill No. 1528, effective January 1, 2025)

Posted on October 11, 2024