What California CDTFA-65 (2020) Is For
California CDTFA-65, Notice of Close-Out, closes a Seller's Permit and related state accounts with the California Department of Tax and Fee Administration. The notice documents business closure, management transfers, or business entity changes, and it limits later tax liabilities.
The form supports the release of security deposits, escrow clearances, and coordination with state and federal agencies for account closure. It also facilitates sales tax license closure, confirms sales tax nexus end dates, and documents marketplace facilitator reporting for final filing periods.
Businesses in Santa Clara must retain records, follow Section IV instructions, and consult a Certified Public Accountant for complex transactions. Board of Equalization guidance still informs closeout practices, and AB 3002 can affect notice timing and documentation requirements.
When You’d Use California CDTFA-65 (2020)
A California taxpayer files CDTFA-65 during business closure, asset sales, ownership transfers, or business structure changes tied to business registration. The notice also applies when the seller’s permit closeout must occur before CDTFA issues a new permit.
Corporate officers should confirm the effective close date matches actual operations and recorded changes. A seller should submit the closure request after completing sales tax return duties, including the final sales tax return and final tax return.
Online Services records reporting changes, and it supports whole-account closeouts, not only location closures. Other state portals do not process CDTFA-65, and CDTFA Online Services remains the correct system for account closure.
Key Rules or Details for 2020
CDTFA expects all sales tax filings through the closeout date, and it expects accurate reporting for fixtures, equipment, and inventory disposition. The final return must include taxable sales, use tax on retained goods, and any unpaid sales tax obligations.
A business must report sales of fixtures and equipment, and it must document inventory sold, donated, or retained. Section III requires a signature that certifies closeout facts, and incorrect dates can trigger sales tax audit follow-ups.
A filer should keep records for required retention periods, and a filer should keep proof of tax payments. Proof can include credit card confirmations, EFT references, canceled checks, and supporting schedules tied to the final sales tax return.
Step-by-Step (High Level)
Step 1: The filer gathers the seller’s permit number, business license details, and account identifiers listed under Permits & Licenses.
Step 2: The filer files the final sales tax return, pays sales tax, reports use tax, and documents taxable sales through the closeout date.
Step 3: The filer completes CDTFA-65 with the closeout date, inventory disposition method, purchaser details, and escrow company information, when applicable.
Step 4: The taxpayer signs Section III, submits the form through Online Services or by mail, and attaches escrow instructions or a bill of sale.
Step 5: The filer saves the submission confirmation, monitors account management status, and retains records for review requests and follow-up contacts.
Common Mistakes and How to Avoid Them
Filers experience processing delays when CDTFA-65 submissions contain recurring closeout errors. Specific corrective actions support accurate closeout processing and complete compliance records.
- Unsigned Certification in Section III: This mistake occurs when the filer submits CDTFA-65 without a signature or date in Section III. The taxpayer must sign, date, and verify the printed name and title before submission.
- Final Return Not Filed Before Closeout: This mistake occurs when the filer submits CDTFA-65 without filing the final sales tax return and final return. The taxpayer must file the final return for the closeout period and confirm that all tax payments have been posted.
- Fixtures and Equipment Omitted From Taxable Sales: This mistake occurs when the filer excludes fixtures and equipment sale amounts from the final return. The taxpayer must report fixtures and equipment proceeds as taxable sales and retain supporting schedules.
- Use Tax Not Reported on Retained Inventory: This mistake occurs when the filer keeps resale inventory and omits use tax on the purchase price. The taxpayer must calculate use tax on retained goods and report the amount on the final return.
- Escrow Instructions or Bill of Sale Not Attached: This mistake occurs when the filer omits escrow instructions or a bill of sale for a business sale. The taxpayer must attach escrow documents and purchaser information with the CDTFA-65 submission.
What Happens After You File
CDTFA reviews the Notice of Close-Out, verifies Seller's Permit status, confirms sales tax return history, and matches tax payments to the closeout period. Staff may request escrow instructions, bills of sale, and inventory records supporting fixtures, equipment, and taxable sales reporting.
Online Services may show status updates while CDTFA completes document review and account reconciliation. After CDTFA confirms compliance, the agency closes state accounts, issues written confirmation, and releases any security deposit under processing rules.
A sales tax audit can still occur, and CDTFA can request books and records during the retention period. Corporate officers should retain proof of payment, maintain accessible records, and provide prompt responses when CDTFA contacts the listed representative.
FAQs
What is CDTFA-65 used for?
CDTFA-65 closes a California seller’s permit account and documents a formal Notice of Close-Out for state accounts.
Can a business file CDTFA-65 online?
A business can file through Online Services, and the sales tax portal provides submission confirmation and status updates.
Does CDTFA-65 replace Franchise Tax Board filings?
CDTFA-65 addresses sales tax and use tax accounts, while Income Tax filings remain with the California Franchise Tax Board.
What paperwork supports a closeout sale?
A seller should attach escrow instructions, a bill of sale, and proof of the final return and tax payments.
Can other portals substitute for CDTFA Online Services?
Other state tax portals do not process CDTFA-65, and CDTFA Online Services remains the correct filing option.
