California Tax Compliance Map

Email: sfo4ww@evershinecpa.com
or
Please contact The Engaging Manager Ian Lin, a well-English speaker
Tel: +1-510-996-2685

GLA – United States – California Corporate Income Tax

GLA-US(CA)-01 GLA Tax Entity

Question from client:
Is United States corporate income tax a federal income tax? A state income tax? Or is there a federal and states income tax?
What if the federal income tax and the states income tax are levied separately or levied together?
What is the standard tax rate? What is the special tax rate?

Answer from Evershine RD:
United States (U.S.) companies must pay both Federal Tax and State Tax.

Federal
Federal Corporate Income Tax Rate is 21%.
S corporation is exempt from federal income tax and exempt from paying taxes at the corporate level.

States – California
California imposed either Corporation Income Tax or Corporation Franchise Tax and Alternative Minimum Tax (AMT).
Businesses will fall either two among the 3 taxes.
Corporate Income Tax Rate is 8.84%.
Franchise Tax Rate is 1.5%.
Minimum franchise tax is $800.
Alternative Minimum Tax (AMT) Rate is 6.65%.

GLA-US(CA)-02 Registration

Question from client:
Which government unit is responsible for the collection of United States corporate income tax?
The registration of the country’s corporate income tax status, that is, the tax certificate number application procedure, paper certificate number application? Or online account application? URL?
What is the advance certificate number for applying for this certificate number?
Do I need to use the industrial and commercial certificate electronic card to apply?

Answer from Evershine RD:

Federal

Federal taxes are governed by Inland Revenue Service (IRS).
Employer Identification Number (EIN) serves as a tax ID number for organizations.
EIN can be registered online via www.irs.gov/ein and get the EIN immediately online.
It must be registered under the responsible party, who is someone in control and must be an individual.

States – California

California taxes are governed by Franchise Tax Board (FTB).
To register MyFTB account requires company 7-digit ID number.
Create a MyFTB account via https://webapp.ftb.ca.gov/MyFTBAccess/Registration/Terms, wait for PIN within 5 to 7 days and login and enter the PIN within 21 days.

GLA-US(CA)-03 GLA Order (OD)

Question from client:
What is the order of United States corporate income tax return (information flow determines tax base) and payment (fund flow)?
Pay first and then declare? Report first and then pays? At the same time as the declaration and payment?

Answer from Evershine RD:
Deposit first (DF). Pay by installment first and declare later.

GLA-US(CA)-04 Mechanism of Filing (MOF)

Question from client:
What is the return method for United States corporate income tax return (information flow determines the tax base)?
Filing cycle: monthly? Every bimonthly? Every season? every half year? Per year?
Electronic filing? Manual filing? Electronic filing and manual filing coexist? If electronic filing is possible: website URL?

Answer from Evershine RD:

Federal
Filing deadline for final corporate tax return:
C corporation – 15^th day of the 4th month following the fiscal year.
S corporation – 15^th day of the 3rd month following the fiscal year.

Filing form:
C corporation – 1120 (income tax), 1120-W (estimated tax)
S corporation – 1120S (income tax), 1120-W (estimated tax)

Filing method:
In general, corporations may file returns either on paper or electronically.
Companies that need to file their tax returns electronically and choose to make their own income tax returns should purchase software approved for electronic filing and take steps to register and complete the IRS e-filing application.
Companies that purchase tax preparation software and prepare their own income tax returns should discuss various electronic filing methods with the software vendor.
Otherwise, companies should check with a tax professional to prepare their electronic income tax returns earlier and ensure they are an IRS-authorized electronic document provider.

https://www.irs.gov/tax-professionals/e-file-provider-services

States – California
Filing deadline for final corporate tax return:
C corporation – 15^th day of the 4th month following the fiscal year.
S corporation – 15^th day of the 3rd month following the fiscal year.

Filing form
C corporation – Form 100 (income tax)
S corporation – Form 100S (income tax), 100-ES Form (estimated tax)
California law requires business entities that prepare an original or amended return using tax preparation software to electronically file (e-file) returns.

Filing method:
CalFile – You must have a MyFTB to use CalFile.
Login MyFTB via https://webapp.ftb.ca.gov/MyFTBAccess/Login/AccessYourAccount

GLA-US(CA)-05 Mechanism of Payment (MOP)

Question from client:
What is the funding method for United States corporate income tax payment (funds flow)?
Payment cycle: M per month? B every bimonthly? Q every season? H every six months? A every year?
Automatically authorize deduction of ACH (that is, take the initiative of the recipient)?
Electronic remittance to EFT (that is, the payer takes the initiative)?
Bank counter payment OCT?
Or the above methods coexist?

Answer from Evershine RD:

Federal

Payment deadline for estimated corporate tax return (Form 1120-W):
15th day of the 4th, 6th, 9th, and 12th months of the tax year.
It is 25% of the corporation’s estimated total taxes for the current year or 25% of the corporation’s taxable income for the previous year (the latter option is not available to corporations with annual income of over $1 million).
Installment payments are not required if the estimated tax is less than $500.
Any corporation that is required to deposit estimated taxes must do so through electronic funds transfer. A U.S. bank account is not required for such transfers if other requirements are met.

Payment method:

EFTPS – Electronic Federal Tax Payment System via https://www.eftps.gov/eftps/.

States – California
Payment deadline for estimated corporate tax return (Form 100-ES):
15^th day of 4^th, 6^th, 9^th, 12^th month after the beginning of your tax year.
Corporations are required to pay the following percentages of the estimated tax liability.
30% for 1^st installment
40% for 2^nd installment
0% for 3^rd installment
30% for 4^th installment
If the estimated tax does not exceed $800 of the minimum tax set, the entire amount of the estimated tax must be paid in full in the first installment, which is due on 15^th of the fourth month of the fiscal year.

Payment method:

1. MyFTB account at https://webapp.ftb.ca.gov/MyFTBAccess/Login/AccessYourAccount
2. Web Pay Business at https://webapp.ftb.ca.gov/webpay/login/belogin?Submit=Use+Web+Pay+business
3. Electronic Funds Transfer (EFT)
4. Credit Card
5. Payment plan

SUT – United States – California Sales and Use Tax

SUT-US(CA)-01 VAT Tax Entity

Question from client:
Is United States Sales and Use Tax (SUT) levied at Federal? States? Or is there a federal plus States SUT?
What if the Federal and States SUT are levied separately or levied together?
What is the standard SUT rate? What are the special SUT rate?

Answer from Evershine RD:
There is no VAT in the United States.
The U.S. federal government currently does not levy either a national VAT or a national general sales tax. Nor do any states impose a VAT.
U.S. state SUT rates range between 2.9% and 7.25%.
Many municipalities also levy local sales taxes.

States – California
SUT Rate is 7.25% which comprise of state rate of 6% and local rate of 1.25%.
The tax rate in your area may be higher than 7.25% depending on the district taxes that apply.
Countries, cities, and towns in California may impose one or more district taxes. Those district tax rates range from 0.10% to 1.00%.
Check the district tax rates according to tax area at https://www.cdtfa.ca.gov/formspubs/cdtfa105.pdf. Taxes collected shall be transmitted to the districts.

SUT-US(CA)-02 Registration

Question from client:
Which government unit is responsible for the levying of Sales and Use Tax in the United States?
The registration of United States Sales and Use Tax levy status, that is, the application procedure for Sales and Use Tax certificate number, paper certificate number application? Or online account application? URL?
What is the advance certificate number for applying for a Sales and Use Tax certificate number?
Do I need to use an industrial and commercial certificate electronic card to apply?

Answer from Evershine RD:
States customarily require sellers, vendors, and retailers to register with the state to obtain a permit to collect and remit sales and use tax, provided certain thresholds are met.
Businesses that conduct taxable transactions in several states are required to register separately in each state.

States – California
The California Department of Tax and Fee Administration (CDTFA) is responsible for the administration of over 30 different taxes and fees.
Every person desiring to engage in or conduct business as a seller within this state shall file an application for a permit for each place of business.
A Seller’s Permit is issued to business owners.
You can apply online via https://onlineservices.cdtfa.ca.gov/_/#1 or may apply at a nearby CDTFA location.
If you plan to make sales for less than 90 days, you may apply for a temporary Seller’s Permit.

SUT-US(CA)-03 WWT Order (OD)

Question from client:
What is the order of United States Sales and Use Tax declaration (information flow determines the tax base) and payment (fund flow)?
Pay first and then declare? First declare and then pay? At the same time as the declaration and payment?

Answer from Evershine RD:
Same period (SP): Filing of SUT return and pay the taxes.

SUT-US(CA)-04 Mechanism of Filing (MOF)

Question from client:
What is the return method for United States Sales and Use Tax declaration (information flow determines the tax base)?
Reporting cycle: every month? Every bimonthly? Every season? every half year? Per year?
Electronic filing? Manual filing? Electronic filing and manual filing coexist? If electronic filing is possible: Website URL?

Answer from Evershine RD:
U.S. state sales and use tax laws most commonly require filings (with payment) monthly, although smaller sellers and special situations may be accorded less frequent filing intervals.
The most common times specified for filing and payment are 15 or 20 days after the close of a month.

States – California
To file the return, login to https://onlineservices.cdtfa.ca.gov/_/#3, you need account number and Limited Access Code
The CDFTA assigns a filing frequency (quarterly, monthly, fiscal year, yearly) based on reported sales at the time of registration.

SUT-US(CA)-05 Mechanism of Payment (MOP)

Question from client:
What is the funding method for United States Sales and Use Tax payment (funds flow)?
Payment cycle: M per month? B every bimonthly? Q every season? H every six months? A every year?
Automatically authorize deduction of ACH (that is, take the initiative of the recipient)?
Electronic remittance to EFT (that is, the payer takes the initiative)?
OCT payment at the bank counter?
Or the above methods coexist?

Answer from Evershine RD:

States – California
Payment due date is the same as filing due date.
Prepayment can be made electronically https://onlineservices.cdtfa.ca.gov/_/#10
Payment can be made electronically at https://onlineservices.cdtfa.ca.gov/_/#1

Payment options:

1. Bank Account
2. Credit Card
3. Electronic Funds Transfer (EFT) Payment
4. Cheque or Money Order
5. Payment plan is usually available for those who cannot pay the total past due amount at once.

Please be aware below Warning:
The above contents are digested by Evershine R&D and Education Center in October 2021.
Regulations might be changed as time goes forward and different scenarios will adopt different options.
Before choosing options, please contact us or consult with your trusted professionals in this area.

Contact Us

San Francisco Evershine BPO Service Limited Corp.
E-mail: sfo4ww@evershinecpa.com

The Engaging Manager Ian Lin, a well-English speaker
Tel: +1-510-996-2685

or
For how to exchange data files between your Finance Accounting System and Evershine Cloud Accounting Information System,
please send an email to HQ4sfo@evershinecpa.com
Dale Chen, Principal Partner/CPA in Taiwan+China+UK will be accountable for your case.
Email address:dalechen@evershinecpa.com
LinkedIn address: Dale Chen

Additional Information

Evershine CPAs Firm Headquarters
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Partner Kerry Chen, USA Graduate School, and a well-English speaker
Tel No.: +886-2-27170515 ext. 105
Mobile: +886-939357000
Email: kerrychen@evershinecpa.com
Skype: oklahomekerry

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(version: 2024/07)
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