CDTFA-401-INST REV. 27 (12-21)                                                                       STATE OF CALIFORNIA
                                                           CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION

                                     Instructions for Completing 
           CDTFA-401-A, State, Local, and District Sales and Use Tax Return

You Can Easily File Your Return Online
Filing your return online is an easy and efficient method of filing your sales and use tax return. When you file your return 
online with the California Department of Tax and Fee Administration (CDTFA), the system calculates tax due based on 
the sales and deduction information you enter. Online filing helps reduce errors by prompting you when items are missed. 
By ensuring the accuracy of your return, you can avoid interest, overpayment, and penalties due to reporting incorrect 
information. By filing your return online, you avoid additional cost for postage or having your return lost in the mail.
Once you have completed and transmitted your return to CDTFA, the return is automatically posted to your account. You 
can also view previously filed online returns, file amendments, file your return early, and set a future date to make your 
payment, as long as the payment is made prior to the due date of the return.
To file your return online, go to www.cdtfa.ca.gov, and select File & Make a Payment.

Making Your Payment
There are three easy and convenient payment options available. Note: Never send cash payments through the mail.

ACH Debit Method
You can file and pay your return in one easy transaction. This is the preferred method for making a payment on a return.
•  Enter your banking information (bank account number and bank routing number).
•  Select a payment date. Payments may be held for any banking day you select up to the tax due date.

Credit Card Payment
You can pay by credit card through a third-party vendor. American Express®, Discover®, MasterCard®, and Visa ®cards 
are accepted. A service fee of 2.30 percent of the transaction amount will be charged by the third-party vendor. This 
service fee is not paid to, or retained by, CDTFA.
You must return to the online filing system after making your credit card payment to complete filing your return.

Paper Check
•  Choose this option to print out a payment voucher to mail in with your check.
•  Print the confirmation page and payment voucher. This voucher is only available immediately after filing your return.
•  Mail in your check, with the account number written on the memo line, with the payment voucher. Make your check or 
  money order payable to the California Department of Tax and Fee Administration. Keep a copy for your records.

Payment Methods When Filing Paper Returns
• Check or Money Order: Make your check or money order payable to the California Department of Tax and Fee 
  Administration, and always write your account number on the check or money order. Be sure to enclose your payment 
  with your return.
• Credit Card:You can charge your tax return payment if you have an American Express®, Discover®, MasterCard®, 
  or Visa ®credit card. Other cards cannot be accepted. To make credit card payments, visit our website at 
  www.cdtfa.ca.gov, or call 1-855-292-8931. The credit card processing vendor will charge a service fee of 2.30 percent 
  of the amount charged. This service fee is not paid to, or retained by, CDTFA.
If you are required by CDTFA to pay taxes by Electronic Funds Transfer (EFT), you must continue to use that method. 
Additional information is available on our website at www.cdtfa.ca.gov.
General Information
These instructions are provided to assist you with completing CDTFA-401-A. If you need assistance, please call our 
Customer Service Center at 1-800-400-7115 (CRS:711). Customer service representatives are available Monday through 
Friday from 8:00 a.m. to 5:00 p.m. (Pacific time), except state holidays.
You must file a return even if you do not owe taxes for the reporting period. If you are unable to file your return on time, 
you may qualify for an extension. A request for an extension of time to file a tax return may be submitted online by 
logging in to your account with your username and password on our website at onlineservices.cdtfa.ca.gov, and select 
the Relief Request option.
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CDTFA-401-INST REV. 27 (12-21)

Page 1
Due on or before—Enter the due date of the return.
Period begin date—Enter the first day for the reporting period. For instance, if you are reporting on the first quarter of 
2020, the date would be January 1, 2020.
Period end date—Enter the last day of the reporting period. For instance, if you are reporting on the first quarter of 2020, 
the date would be March 31, 2020.
Account number—Enter your account number, which can be found on your seller’s permit.
If you are filing an amended return, check the box to indicate that this filing represents an amended return.

Lines 1 through 3—Page 1
Sales • Purchases Subject to Use Tax

Line 1. Total Sales
Enter your total taxable and nontaxable sales for the reporting period, including lease and rental receipts. Report all sales 
(in any manner) related to doing business in California. You will deduct current period nontaxable transactions in Sections 
A through D on page 3.
•  Include all charges related to your sales, such as labor, service, and shipping and handling charges.
     –   Used Vehicle Dealers: Also include charges related to your vehicle sales  
      (for example, document fees, smog certification fee, mandatory warranties, among others).
•  If you sold any business assets, such as fixtures and equipment, during the reporting period, you must report the 
sale. If you are filing your final return and reporting the sale of the business assets, see the last bullet under “Line 2. 
Purchases Subject to Use Tax.”
•  Your total sales may include amounts for California sales or use taxes. If this is the case, be sure to deduct those tax 
amounts on Section A, line 9. If you do not, you will overpay tax.

Line 2. Purchases Subject to Use Tax
Enter your total purchases that are subject to use tax, as explained below.
Your purchases of merchandise, equipment, and other tangible personal property are subject to use tax and must be 
reported if you:
•  Purchased the property from an out-of-state retailer who did not collect California use tax, or
•  Purchased the property with a resale certificate or other exemption certificate, and used the property in California for a 
purpose other than:
     –  Resale or
     –  Demonstration, retention, or display while holding it for sale in the regular course of business.
You must also report your purchase of a vessel or aircraft if you:
•  Purchased it from an unlicensed retailer who did not charge tax on the transaction and
•  Used the property for a purpose other than resale as described above.
Enter the amount you paid for the property.
Note:
•  If you paid another state’s sales or use tax on your purchase, do not include the tax payment as part of your purchase 
price. You may be eligible for a credit for the other state’s tax (see instructions for line 20c).
•  If you are reporting property purchased with a resale certificate, report the purchase price on the tax return for the 
reporting period during which you first used the property in California.
•  If you are reporting property purchased from an out-of-state retailer who did not charge you for California tax, report 
the purchase price on the tax return for the reporting period during which you first used the property in California.

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CDTFA-401-INST REV. 27 (12-21)

•  If you are closing out your seller’s permit and have sold fixtures and equipment, you should report the sales price and 
identify the sale as “fixtures and equipment” on line 2 of your final sales and use tax return. You must also report any 
inventory you intend to retain for your own use or for use as a gift, that was purchased for resale without the payment 
of tax or tax reimbursement, on line 2 of your final sales and use tax return and identify it as “retained inventory.” Sales 
of inventory to another retailer or to the purchaser of your business are not taxable but should be reported as “Sales 
for Resale” on line 4 of your return. A resale certificate should be obtained from the buyer and saved in your records. 
For more detailed information, see publication 74, Closing Out Your Account.

Line 3. Total
Add lines 1 and 2 to find your total sales and purchases subject to use tax. Enter the result on line 3.

Page 3
Nontaxable Sales, Current Period Tax Recovery Adjustments and Deductions, and Current Period Partial Tax 
Exemptions
Full deductions in Section A and B are transactions not subject to tax and will be subtracted from the total on line 3. 
Report your current period partial tax-exempt transactions on page 3, in Sections C and D (see instructions below). 
Enter the total in Section D, line 6 and on page 1, line 20a. Complete CDTFA-531-Q, Schedule Q—Tax Recovery, prior 
period tax recovery credits on page 1, line 20b.
You must maintain records that support all claimed deductions.

Section A. Nontaxable Sales (deductions)—Page 3
Any transaction(s) under this section must be included on line 1, Total Sales, on page 1.
If you have no Section B Current Period Tax Recoveries and Deductions or adjustments, the total from this section will 
be the total for page 1, line 11 (Total Nontaxable Transactions Reported).

Line 4. Sales to Other Retailers for Purposes of Resale
Enter your total sales to other sellers who submitted resale certificates to you for their purchases.
In general, you can accept resale certificates from other sellers who are buying property to resell in the regular course of 
business. If you obtain a timely and valid resale certificate, taken in good faith, tax will not apply to your sale. For more 
information, see CDTFA-230, General Resale Certificate.
To be valid, resale certificates must contain specific information. For more information, see Regulation 1668, Sales for Resale.
You can verify the validity of sellers' permits by calling our Seller's Permit Verification service at 1-888-225-5263 or by 
visiting our website at www.cdtfa.ca.gov.
Note: VEHICLE AUCTIONEERS—If you are a vehicle auctioneer claiming a deduction under line 4 for vehicles sold at 
an auction, you must complete CDTFA-531-AA, Vehicle Auction House Sales, and provide it with your sales and use tax 
return.

Line 5. Nontaxable Sales of Food Products
Enter your nontaxable sales of food products sold for human consumption.
Whether food product sales are taxable depends on many conditions, including who makes the sale, where the sale 
occurs, who the customer is, and what is sold. For example, the following sales are generally taxable and should not be 
deducted:
•  Sales of alcoholic and carbonated beverages.
•  Sales of hot prepared food products.
•  Sales of meals or food sold for consumption at your place of business or sold for consumption in a place where 
admission is charged.

For more information on food sales, see Regulation 1602, Food Products, or Regulation 1603, Taxable Sales of Food 
Products. Vending machine operators should order Regulation 1574, Vending Machine Operators, and publication 118, 
Vending Machine Food Sales.

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CDTFA-401-INST REV. 27 (12-21)

Line 6. Nontaxable Labor (repair and installation)
Enter labor charges for installing premanufactured property or for repairing or reconditioning property to restore it to its 
original use.
Note: Labor charges for making or fabricating a new product (such as labor charges for making a ring or furniture), or for 
assembling a product, are generally taxable and should not be deducted. Tax applies even if your customer provides the 
property that you fabricate. For more information, see Regulation 1546, Installing, Repairing, Reconditioning in General, 
and publication 108, Labor Charges.

Line 7. Sales to the United States Government
Enter sales made to:
•  The United States government or its unincorporated agencies and instrumentalities, such as the following federal 
departments: Treasury, Interior, Agriculture, or Defense.
•  Any incorporated agency or instrumentality of the United States wholly owned by either the United States or by a 
corporation wholly owned by the United States.
•  The American Red Cross, its chapters and branches.
•  Federal reserve banks, federal credit unions, federal land banks, and federal home loan banks.

Note: Sales made to the State of California or to cities, counties, and local governments in the state are generally taxable 
and should not be deducted. They are treated like any other sale. (Regulation 1614, Sales to the United States and Its 
Instrumentalities, or publication 102, Sales to the United States Government.)

Line 8. Sales in Interstate or Foreign Commerce
Enter sales that are exempt from tax as interstate or foreign commerce (sales involving shipments or deliveries from 
California to points outside this state).
For a sale to be exempt, the sales agreement or contract must require the property to be shipped to an out-of-state 
point, and you must either:
•  Use your company vehicle (or other conveyance operated by your business) to ship the property to that location, or
•  Deliver the property to a carrier, customs broker, or forwarding agent for shipment outside this state. 

For more information, see Regulation 1620, Interstate and Foreign Commerce    , or publication 101, Sales Delivered 
Outside California.

Line 9. Sales Tax Included on Line 1 (if any)
Enter only the California sales or use tax amounts that are included on line 1. For more information, see Regulation 1700, 
Reimbursement for Sales Tax.

Line 10. Other Deductions
You must retain records which explain each deduction claimed.
You may be entitled to claim other deductions in addition to those allowed on lines 4 through 9. Enter the amount for 
those deductions on line 10.
Examples of transactions that may be deductible include the following:
•  Sales of medicinal cannabis. The exemption only applies to retail sales on or after November 9, 2016, of medical 
cannabis, medicinal cannabis concentrate, edible medicinal cannabis products, or topical cannabis as those terms are 
defined in Business and Professions Code section 26001. To obtain the exemption, qualified patients or their primary 
caregiver need to provide their valid Medical Marijuana Identification Card issued by the California Department of 
Public Health, under section 11362.71 of the Health and Safety Code, and a valid government-issued identification 
card at the time of purchase. For additional text relating to this deduction, see Tax Guide for Cannabis Businesses 
online at www.cdtfa.ca.gov.
•  Sales by pharmacists of prescription medicines for use by humans. For more information, see Regulation 1591, 
Medicines and Medical Devices.

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CDTFA-401-INST REV. 27 (12-21)

•  Transportation charges for delivering goods to a purchaser by an independent carrier (the transportation charges 
must be separately stated on the invoice). If you charge more for delivery than your actual costs, the added amount 
is subject to tax and cannot be deducted. For more information, see Regulation 1628, Transportation Charges, or 
publication 100, Shipping and Delivery Charges.
•  Sales of animals, seeds, plants and fertilizer, used as, or used to produce, food for human consumption. 
For more information, seeRegulation 1587, Animal Life, Feed, Drugs and Medicines, Regulation 1588, Seeds, Plants 
and Fertilizers, and Tax Guide for Agricultural Industry online at www.cdtfa.ca.gov.
For more information, request a copy of publication 61, Sales and Use Taxes: Exemptions and Exclusions.

Section B. Current Period Tax Recoveries and Deductions
If you have tax recovery deductions or adjustments prior to the period covered by your return, you will be 
required to complete CDTFA-531-Q, Schedule Q—Tax Recovery, to claim those credits.

Line 1. Bad Debt Losses on Taxable Sales
Enter bad debt losses, as described below.
If you have reported a taxable sale and have been unable to collect payment for the sale, you may take a deduction for 
the taxable sales portion of the bad debt.
Bad debts may take the form of:
•  Checks that have been returned to you unpaid by the purchaser’s bank which you have determined to be 
uncollectible, or
•  Amounts from charge or credit sales that you have determined to be uncollectible.

The bad debts must be charged off for income tax purposes, or, if you are not required to file income tax returns, the bad 
debts must be charged off in accordance with generally accepted accounting principles. 
Enter only the amount of the sale before tax. For example, if you sold merchandise for $15 plus sales tax and were 
unable to collect any amount for the sale, you would claim $15 as a deduction. 
If you claim a bad debt deduction and later recover a payment, you must report the payment on the tax return filed for 
the period in which the recovery payment was made. (Regulation 1642, Bad Debts.)

Line 2. Cost of Tax-Paid Purchases Resold Prior to Use
Claiming Cost of Tax-Paid Purchases Resold Prior to Use (Excludes Motor Vehicle Fuel and/or Diesel Fuel)
You may claim a deduction on this line if you:
•  Paid California sales or use tax when purchasing goods or merchandise, and
•  Sold the property without first using it (other than retaining, demonstrating, or displaying it while holding it for sale in 
the regular course of business).
Enter only the amount of the purchase price before tax. For example, if the property was sold to you for $15 plus tax, you 
would claim only $15 as a deduction. For more information, see Regulation 1701, Tax-Paid Purchases Resold.
Claiming Cost of Tax-Paid Purchases Resold Prior to Use for Motor Vehicle Fuel (MVF) and/or Diesel Fuel
If you paid California sales or use tax on motor vehicle fuel and/or diesel fuel and you need to claim a tax recovery 
deduction (that is, Cost of Tax-Paid Purchases Resold Prior to Use), please follow the detailed instructions below. For 
additional text relating to this deduction, see Tax Guide for Motor Vehicle Dealers online at www.cdtfa.ca.gov.
To calculate your allowable Cost of Tax-Paid Purchases Resold deduction for motor vehicle fuel purchases, you will need 
to know:
1. The total cost of your motor vehicle fuel purchases, and
2. The tax rate of the fuel station’s location.
After you have gathered this information, follow the steps below. Calculations transferred to the return should be in whole 
dollars. As a result, there may be minor differences due to rounding when calculating the return.

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CDTFA-401-INST REV. 27 (12-21)

To illustrate, we included an example that assumes $30,000.00 in motor vehicle fuel purchased at a location with an 
8.50 percent tax rate.

                                                                                      Example      Worksheet
A Enter the total amount of motor vehicle fuel purchases.                           $ 30,000.00  $                  A
  Enter the tax rate of the fuel station location (look up  
B                                                                                     0.085                         B
  city and county tax rate). Enter the tax rate as a decimal.
C Motor vehicle fuel partial state-exemption rate.                                    0.0500       0.0500           C
  Subtract line C from line B. This is the rate you actually paid on your 
D                                                                             B – C   0.0350                        D
  motor vehicle fuel purchases.
E Factor.                                                                             1.0000       1.0000           E
F Add line D and line E.                                                      D + E   1.0350                        F
  Divide line A by line F. This is the measure of motor vehicle fuel 
G                                                                             A ÷ F $ 28,985.51                     G
  purchased excluding tax. 
  Subtract line G from line A. This is the amount of tax on motor vehicle 
H                                                                             A – G $ 1,014.49                      H
  fuel to be recovered.
  Enter the combined state and local tax rate for the period. Enter the  
I                                                                                     0.0725       0.0725           I
  tax rate as a decimal.
J Subtract line I from line B.                                                B – I   0.0125                        J
  If line J is zero, enter zero here. Otherwise, multiply line G by line J. 
K                                                                             G x J $ 362.32                        K
  This is the amount of district tax paid.
  Subtract line K from line H. This is the amount of state, local, and  
L                                                                             H – K $ 652.17                        L
  county tax paid.
  Divide line L by line I. This is the amount of your Cost of Tax-Paid 
  Purchases Resold deduction on your sales and use tax return. In 
  addition, this amount must be subtracted from your sales for the 
M                                                                             L ÷ I $ 8,996                         M
  appropriate tax jurisdiction on CDTFA-531-A2, Schedule A2—
  Computation Schedule for District Tax—Long Form (Column A5).  
  Round to the nearest dollar.
  If line J is zero enter zero here. Otherwise, divide line K by line J.  
N                                                                             K ÷ J $ 28,986                        N
  Round to the nearest dollar.
  If line J is zero, enter zero here. Otherwise, subtract line N from line M. 
O Enter this amount on CDTFA-531-A2 adjustment column                         M – N $ -19,990                       O
  (Column A6/A7).

CLAIMING COST OF TAX-PAID PURCHASES RESOLD PRIOR TO USE (DIESEL FUEL)
To calculate the correct amount of your allowable Cost of Tax-Paid Purchases Resold deduction for diesel fuel 
purchases, you will need to know:
  1.  The total cost of your diesel fuel purchases, and
  2.  The number of gallons of diesel fuel purchases, and
  3.  The tax rate of the fuel station’s location.

After you have gathered this information, follow the steps below. Calculations transferred to the return should be in whole 
dollars. As a result, there may be minor differences due to rounding when calculating the return.

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CDTFA-401-INST REV. 27 (12-21)

To illustrate, we included an example of 5,000 gallons of diesel fuel purchases totaling $20,000.00, purchased at a 
location with an 8.00 percent tax rate.
                                                                                       Example     Worksheet
A Enter the total amount of diesel fuel purchases.                                   $ 20,000.00                        A
B Enter the number of gallons you purchased.                                           5,000.00                         B
C State diesel fuel excise tax.                                                        0.3600      0.3600               C
D Multiply line B by line C. This is your nontaxable state diesel excise tax.  B x C $ 1,800.00                         D
  Subtract line D from line A. This is the tax-included price of diesel 
E                                                                              A – D $ 18,200.00                        E
  without the state excise tax.
  Enter the tax rate of station's location (look up city and county tax rate). 
F                                                                                      0.0800                           F
  Enter the tax rate as a decimal. 
G Additional sales tax on diesel fuel.                                                 0.0575      0.0575               G
  Add line F and line G. This is the diesel sales tax rate. This is the rate  
H                                                                              F + G   0.1375                           H
  you actually paid on your diesel purchases.
I Factor.                                                                              1.0000      1.0000               I
J Add line H and line I.                                                       H + I   1.1375                           J
K Divide line E by line J (measure of diesel purchases excluding tax).         E ÷ J $ 16,000.00                        K
  Subtract line K from line E. This is the amount of sales tax paid on  
L                                                                              E – K $ 2,200.00                         L
  diesel fuel to be recovered.
M Diesel fuel statewide tax rate.                                                      0.1300      0.1300               M
N  Subtract line M from line H. This is the district tax rate.                 H – M   0.0075                           N 
O Multiply line K by line N. This is the amount of district tax paid.          K x N $ 120.00                           O
  Subtract line O from line L. This is the amount of state, local, county,  
P                                                                              L – O $ 2,080.00                         P
  and state diesel tax paid.
Q Enter the combined state and local tax rate for the period.                          0.0725      0.0725               Q
  Divide line P by line Q. This is the amount of your Cost of Tax-Paid 
  Purchases Resold deduction on your sales and use tax return. This 
R amount must also be subtracted from your sales for the appropriate tax       P ÷ Q $ 28,690.00                        R
  jurisdiction on CDTFA-531-A2, Schedule A2—Computation Schedule for 
  District Tax—Long Form (Column A5). Round to the nearest dollar.
  Subtract line K from line R. Enter this amount in the adjustment column 
S of the applicable District Tax Area on CDTFA-531-A2 (Column A6/A7).          R – K $ 12,690.00                        S
  Round to the nearest dollar.

Line 3. Returned Taxable Merchandise
Enter amounts you credited or refunded to customers for returned taxable merchandise, as described below. You can 
take this deduction only if:
•  You returned or credited to your customer the full sales price, including sales tax charges, and
•  The customer, in order to obtain the refund or credit, is not required to purchase other property at a price greater than 
the amount charged for the property returned.
Claim only the amount of the sale before tax. For example, if the returned merchandise had been sold for $15 plus sales tax, 
you would claim only $15 as a deduction. For more information, see Regulation 1655, Returns, Defects and Replacements.

Line 4. Cash Discounts on Taxable Sales
If you gave a cash discount to a customer on a taxable sale, enter the amount of the discount here.
You can claim a deduction on this line only if you reported the full (undiscounted) selling price on line 1. Do not use 
this line if you reported the discounted selling price on line 1 of this return or a previous return. In addition, you must 
ensure that you do not collect from your customer more tax than the amount due on the discounted price. If you 
collect more than the amount due on the discounted price, you cannot claim this deduction. For more information, see 
Regulation 1671,  Trading Stamps and Related Promotional Plans  , and Regulation 1700, Reimbursement for Sales Tax.
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Section C. Current Period Partial Tax Exemptions at 0.05 Partial Exemption Rate
Exemption Certificate Requirements
Retailers who wish to claim a partial exemption must obtain from purchasers a timely, valid exemption certificate as 
described in Regulation 1667, Exemption Certificates. CDTFA has designed a specific certificate for this purpose, 
entitled, “Partial Exemption Certificate.” The certificate is available on our website at www.cdtfa.ca.gov or by calling 
our Customer Service Center toll-free at 1-800-400-7115 (CRS:711) for a copy. Retailers must retain the completed 
certificate for a period of not less than four years.

Line 1. Teleproduction Equipment
Complete this line to claim an exemption for sales or purchases made by qualified persons of tangible personal property 
used primarily in:
•  Teleproduction or other postproduction services for film or video that include editing, film and video transfers, 
transcoding, dubbing, subtitling, credits, closed captioning, audio production, special effects (visual or sound), 
graphics, animation; or
•  With respect to property with a useful life of at least one year to maintain, repair, measure, or test property used 
primarily in teleproduction or other postproduction services.

A qualified person is a business that is primarily engaged in providing the specialized motion picture or video 
postproduction services described above.
A qualified purchaser must provide the retailer with a section 6378 Exemption Certificate; otherwise, the exemption will 
not be allowed.
This exemption does not apply to the sale or use of any tangible personal property that is used primarily in 
administration, general management, or marketing (used 50.00 percent or more of the time in one or more of those 
activities). For more information, see Regulation 1532, Teleproduction or Other Postproduction Service Equipment.

Line 2. Farm Equipment and Machinery
For a description of exempt farm equipment and who is eligible to claim this exemption see publication 66, Agricultural 
Industry, Regulation 1533.1, Farm Equipment and Machinery, and Tax Guide for Agricultural Industry online at  
www.cdtfa.ca.gov.
Complete this line to claim a partial exemption for the sale, storage, use or other consumption of qualified farm 
equipment, machinery and their parts, as described below. The partial exemption also applies to qualified lease 
payments for farm equipment and machinery rentals.

Who Can Claim a Partial Exemption?
You can claim this partial exemption if you are a person engaged in an agricultural business described in Codes 0111 
to 0291 of the Standard Industrial Classification (SIC) manual, or are a person that assists such classified persons by 
performing an agricultural service described in Codes 0711 to 0783 of the SIC manual.

What Type of Equipment Is Eligible?
•  “Implements of husbandry,” as defined in Revenue and Taxation Code (R&TC) section 411. Such property generally 
includes any tool, machinery, equipment, appliance, device, or apparatus. The farm equipment, machinery, and parts 
must be used primarily in producing and harvesting agricultural products. “Primarily” means 50.00 percent or more of 
the time.
•  Property as defined in Chapter 1, Division 16, of the Vehicle Code used exclusively in agricultural operations. Such 
property under certain conditions includes lift carriers, tip-bed type trailers, trailers/semi-trailers having no bed, 
spray or fertilizer applicator rigs, nurse rigs or equipment auxiliaries, row dusters, trap wagons, fertilizer nurse tanks 
or trailers, cotton trailers, truck tractors, and truck tractor/semi-trailer combinations. Vehicles primarily designed for 
the transportation of persons or property on a highway are generally not considered implements of husbandry and, 
therefore, do not qualify for this partial exemption.

Line 3. Diesel Fuel Used in Farming and Food Processing
For additional information for this exemption, refer topublication 66,Regulation 1533.2   , Diesel Fuel Used in Farming 
Activities or Food Processing, and Tax Guide for Agricultural Industry online at www.cdtfa.ca.gov.

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CDTFA-401-INST REV. 27 (12-21)

Complete this line to claim a partial-tax exemption for the sale, storage, use, or other consumption of diesel fuel used in 
farming or food processing activities.
The diesel fuel must be consumed during the activities of a farming business as set forth in Internal Revenue Code (IRC) 
263A or food processing. A farming business is a business that grows crops, fruit- or nut-bearing trees, sod, or nursery 
plants. Farming activities also include transporting these crops, fruit- or nut-bearing trees, sod, or nursery plants to the 
marketplace.

Line 4. Timber Harvesting Equipment and Machinery
For additional information for this exemption, refer to Regulation 1534, Timber Harvesting Equipment and Machinery.
Complete this line to claim a partial exemption of the sales and use tax for the sale, use, or other consumption of timber 
harvesting equipment, machinery, and their parts. Such equipment and machinery must be designed for use 50.00 
percent or more of the time off-road in commercial timber harvesting and be used 50.00 percent or more of the time in 
timber harvesting. A qualified person is a person who is engaged in commercial timber harvesting. Commercial timber 
harvesting involves the cutting or removal, or both, of timber and other solid wood forest products from timberlands for 
commercial purposes. The partial exemption also applies to a qualified person’s lease payments for qualified commercial 
timber harvesting equipment and machinery rentals.
Timber is considered to be trees of any species, excluding nursery stock, harvested for forest products. Some examples 
of these products include firewood, Christmas trees, biomass, poles, and pilings.
Typical off-road commercial harvesting equipment and machinery and their general use that may be eligible for this 
partial exemption include:
•  Tractors or rubber-tired skidders—move the logs from the woods to the logging trucks.
•  Front-end loaders—load logs onto trucks.
•  Feller-bunchers—cut very small trees.
•  Cable Yarders—harvest trees on very steep slopes by suspending the logs on a cable.
•  Chippers—chip small logs and brush into very small pieces.
•  Chainsaws—used to cut down trees.

Line 5. Racehorse Breeding Stock
For additional information for this exemption, refer to Regulation 1535, Racehorse Breeding Stock.
Complete this line to claim a partial exemption of the sales and use tax for the sale, storage, use, or other consumption 
of “racehorse breeding stock.”
“Racehorse breeding stock” means racehorses capable of, and purchased solely for, the purpose of breeding.

Section D. Current Period Partial Tax Exemptions at 0.039375 Partial 
Exemption Rate

Line 1. Manufacturing and Research & Development Equipment
For additional information for this exemption, refer to Regulation 1525.4, Manufacturing and Research & Development 
Equipment, or see our Tax Guide for Manufacturing and Research & Development Equipment Exemption located at  
www.cdtfa.ca.gov.
This transaction is partially exempt from the total sales and use tax rate. It remains subject to 3.3125 percent of the total 
sales and use tax rate, plus any applicable district taxes.
Complete this line to claim a partial state tax exemption for the sale, storage, use or other consumption of qualified 
manufacturing and research and development equipment, as described below.

To be eligible under this law, the purchaser must meet all three of these conditions:
•  Be engaged in certain types of business, also known as a “qualified person.”
•  Purchase “qualified property.”
•  Use that qualified property for the uses allowed by this law.

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CDTFA-401-INST REV. 27 (12-21)

Line 2. Zero-Emission Transit Bus
Complete this line to claim a partial state-tax exemption for sales and leases of zero-emission technology transit buses 
by the following qualifying purchasers:
•  City, county, or city and county; or
•  Transportation or transit district; or
•  Public agencies that provide transit services to the public.

This transaction is partially exempt from the total sales and use tax rate. It remains subject to 3.3125 percent of the total 
sales and use tax rate, plus any applicable district taxes.
The reduced sales or use tax rate is applied to the total selling price of the vehicle before any incentives, such as a 
voucher from the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP), is applied. To report your 
sales of eligible zero-emission technology buses on your sales and use tax return, report the total selling price in your 
total sales.
For additional information for this exemption, refer to R&TC section 6377.

Prior Period Tax Recovery (CDTFA-531-Q)
To claim a tax recovery from a prior period, complete CDTFA-531-Q, Schedule Q—Tax Recovery. Enter the total on  
page 1, line 20b.

Page 1
Line 11. Total Nontaxable Transactions Reported
This is your total nontaxable transaction(s) from Section B, line 6, on page 3 of your return. This amount will be 
subtracted from the total of your sales and purchases to arrive at the amount on which tax is calculated.

Line 12. Transactions Subject to State Tax
Subtract line 11 from line 3. Enter the result on line 12.

Line 13. State Tax 6.00 Percent
Multiply line 12 by 0.0600. This is the amount of state tax. For a breakdown of the state tax rate, see  
Detailed Description of the Sales and Use Tax Rate located on our website at www.cdtfa.ca.gov.

Line 14. County Tax ¼ Percent
Multiply line 12 by 0.0025. This is the amount of county taxes. Enter the result on line 14.

Line 15. Local Tax 1.00 Percent
Multiply line 12 by 0.01. This is the amount of local taxes. Enter the result on line 15. 

Line 16. District Tax
If your transaction(s) occur(s) in more than one taxing jurisdiction (higher than the current state tax rate), you must 
complete CDTFA-531-A2, Schedule A2—Computation Schedule for District Tax—Long Form. Instructions are included 
with the schedule.

Line 17. Total State, County, Local, and District Tax
Line 17 represents the total tax liability for this reporting period. Add lines 13, 14, 15, and 16. Enter the result on line 17.

Line 18. Excess Tax Collected
If you have overcharged your customers and collected more sales tax than the amount reported due, enter the amount of 
sales tax that you have over-collected.

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CDTFA-401-INST REV. 27 (12-21)

Line 19. Total Tax Amount
Add line 17 and line 18. Enter the result on line 19.

Line 20a. Credit for Current Period Partial Tax Exemptions
Complete Sections C and D on page 3 of the return. The Total Current Period Partial Exemption Amount on page 3, 
Section D, line 6 should be entered on page 1, line 20a.

Line 20b. Credit for Prior Period Tax Recovery
Complete CDTFA-531-Q, Schedule Q—Tax Recovery  , and enter the total tax recovery adjustment amount on page 1, 
line 20b. Instructions are included with CDTFA-531-Q.

Line 20c. Credit for Tax Paid to Other State(s)
Complete CDTFA-531-P, Schedule P—Tax Paid to Other State(s), and enter the total credit for tax paid to other state(s) 
amount on page 1, line 20c. Instructions are included with CDTFA-531-P.

Line 20d. Credit for Aircraft Common Carrier Partial Exemption
Complete CDTFA-531-X, Schedule X—Partial Exemption from Bradley-Burns Local Taxes Aircraft Common Carrier, and 
enter the total credit for aircraft common carrier partial exemption amount on page 1, line 20d. Instructions are included 
with CDTFA-531-X.

Line 20e. Total Credit
Add lines 20a, 20b, 20c, and 20d. Enter the result on line 20e.

Line 21. Net Tax
Subtract line 20e from line 19. Enter the result on line 21.

Line 22. Less Tax Prepayments
Complete this line if you made any tax prepayments. Businesses with average monthly taxable transactions of $17,000 
or more must make prepayments, once notified by CDTFA.
Enter the prepayment amounts in the proper spaces. This credit is limited to the amounts of tax prepaid and should not 
include penalties or interest charges reported with your prepayments.
If you are reporting a zero prepayment for any period because you had no taxable transactions, you must check the box 
below the appropriate prepayment field to certify that you had no prepayment due.
Note: FUEL SELLERS—If you sell fuel and pay sales tax to your fuel supplier, do not use this line to claim a credit for those tax 
payments. Credit can be claimed on CDTFA-531-G, Schedule G—Fuel Seller’s Supplement to Sales and Use Tax Return.

Line 23. Net Tax Less Prepayments
Subtract line 22 from line 21. Enter the result on line 23.

Line 24. Sales Tax Paid to DMV
Complete CDTFA-531-MV, Used Vehicle Dealers—Sales Report, and enter the total amount from column D on the 
schedule on line 24 of this return.

Line 25. Remaining Tax
Subtract line 24 from line 23. Enter the result on line 25.

Line 26. Penalty
If your tax payment is made or your tax return is filed after the due date shown at the top of the return, you must pay a 
10.00 percent penalty. Multiply line 23 by 0.10, and enter the result on line 26.

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CDTFA-401-INST REV. 27 (12-21)

Returns and payments must be postmarked or received by the due date of the return to be considered timely. If the due date 
falls on a Saturday, Sunday, or state holiday, returns postmarked or received by the next business day will be  considered timely.
Businesses required to pay sales and use taxes by EFT may also be subject to a 10.00  percent penalty for failure to pay 
by EFT (payment made by check, for example). However, a 10.00 percent maximum penalty applies to returns and return 
payments.

Line 27. Penalty Paid to DMV for Late Payments of Sales Tax
Complete CDTFA-531-MV, Used Vehicle Dealers—Sales Report, and enter the total amount from column E on the 
schedule on line 27 of this return.

Line 28. Penalty Due
Subtract line 27 from line 26. Enter the result on line 28. If line 28 is less than 0, enter 0.
Note: USED VEHICLE DEALERS
•  If you made timely sales tax payments to DMV but are filing a late sales and use tax return, your return is subject to a 
late filing penalty of 10.00 percent.
•  If you paid penalties to DMV, you can reduce the amount of penalty due up to the amount of penalties you paid DMV.  
If the amount entered on line 27 results in line 28 being less than 0, enter 0.

Line 29. Interest
If your payment is late (see line 26 in the instructions above for an explanation of due dates), you must pay interest 
charges in addition to penalty charges.
You owe one month of interest for each month or portion of a month the payment is overdue. For example, if your 
payment is one month and two weeks overdue, you owe two months of interest.
Using the interest rate printed on line 29 of your return, multiply the rate times the total tax owed. Enter the result on line 29.
Reminder  : If you owe two or more months’ interest, as described above, you must multiply the amount due by the 
number of months overdue.

Line 30. Total Amount Due and Payable
Add lines 25, 28, and 29. Enter the result on line 30. See page 1 for acceptable payment methods.

Line 31. Sales at State-Designated Fairgrounds
As of July 1, 2018, you must report the portion of sales reported on line 1 for which the place of sale is on or within the 
real property of a state-designated fair or any real property of a state-designated fair that is leased to another party. 
Enter the amount of sales you made on state-designated fairgrounds on line 31. The amount reported on line 31 is only 
for informational purposes and is not to be used for calculating any sales or use tax on this return. A complete listing of 
state-designated fairs is available on our website at www.cdtfa.ca.gov/taxes-and-fees/state-fairgrounds-list.htm.

Completing Your Return
To complete your return, please include your signature, printed name and title, date, email address, and telephone number.
If your return was completed by someone other than you, please include your preparer’s name and telephone number.
Make a copy of this return for your records.
If you're paying by check or money order, remember to make your check or money order payable to California 
Department of Tax and Fee Administration. Write your account number on your check or money order.
Send your return to:
CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION 
PO BOX 942879 
SACRAMENTO CA 94279-8062

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