To close a California seller’s permit, notify the California Department of Tax and Fee Administration (CDTFA) that your business or taxable activity has ended, file any required final and overdue returns, and pay outstanding amounts. You can request closure through the CDTFA online services portal or, if you cannot use online services, submit form CDTFA-65, Notice of Closeout. Closing the account does not erase tax duties for sales or other taxable activity through the closeout date.
California’s sales tax can include district taxes on top of the statewide rate, and the applicable rate depends on the delivery address down to street level. That makes it especially important to reconcile transactions and report the correct sales through your final date. The steps below explain what to report, what to do if you sold or changed ownership of the business, and what obligations may continue after closure.
Know when to close your California seller’s permit
Tell the CDTFA when you stop operating, sell your business or stock of goods, change the form of ownership, or discontinue the taxable activity covered by your account. The CDTFA also identifies certain partnership changes and changes to the type of business as reasons to close or update an account. Do not assume that stopping sales automatically closes your permit.
Before starting, identify the date your taxable business activity ended and gather your permit and account details. Consider whether you still have inventory, made purchases for your own use using the permit, or sold business property. Those details can affect your final reporting. If you are continuing under a different legal owner or business structure, check whether the existing account should close and a new permit is needed rather than treating the change as a simple account update.
Close your CDTFA account online or by mail
You can request account closure through the CDTFA online services portal. Sign in, select the relevant account, and follow the close-account instructions. The CDTFA may contact you for additional information; the account is closed after its review. Keep a record of your request and any confirmation or follow-up.
If you cannot access online services, complete CDTFA-65, Notice of Closeout, and send it to the address shown on the current form. The form asks for closeout information such as the business closure date, inventory disposition, and whether the business was sold. Include supporting documents requested for your circumstances. Check the current CDTFA form and instructions for the correct mailing details before sending anything.
Prepare and submit CDTFA-65
CDTFA-65 is the CDTFA’s Notice of Closeout. Use it to provide information that helps the department close your account and, where applicable, address posted security or an escrow clearance. It is the mail-in route when you do not use the online services portal; it is not a substitute for filing your final sales and use tax return.
Complete the form accurately, including the closure date and information about remaining inventory, purchases for resale, purchases from out-of-state vendors without tax paid, and any sale of the business. The form also asks about purchases made for your own use using the permit. If you sold fixtures or equipment, the CDTFA form instructs you to include their selling price on the final return under purchases subject to use tax. Follow the current form’s instructions for supporting documents and submission.
File final returns, pay balances, and meet the deadline
Yes, you generally need to file a final California sales and use tax return for the account, as well as any earlier returns that remain unfiled. Report sales through the closeout date, including relevant sales of furniture, fixtures, or equipment made as part of closing or selling the business. Pay taxes and any other amounts due, which may include fees, surcharges, assessments, penalties, or interest. Closing the account does not itself file a return or settle a balance.
The CDTFA says the final return is normally filed on the account’s usual monthly or quarterly due date. Your assigned filing schedule and circumstances determine the applicable deadline, so check the due date shown in your CDTFA account or confirm it with the department. File and pay through online services where available, and do not assume that submitting a closeout request changes a return deadline. If a final return is not available in your account, contact the CDTFA for instructions.
Report inventory, fixtures, and equipment
Closing can involve taxable transactions beyond ordinary customer sales. Review what happened to resale inventory: it may have been sold, transferred, retained for personal or business use, or otherwise disposed of. The CDTFA-65 asks how remaining inventory and certain untaxed purchases were handled. If you kept items for your own use after buying them without tax for resale, you may need to report and pay use tax; the treatment depends on the facts and the applicable rules.
Also account for furniture, fixtures, and equipment sold as part of the closure or business sale. The CDTFA instructs sellers to include the selling price of fixtures and equipment on the final return under purchases subject to use tax. Keep the bill of sale, escrow instructions, and records showing the value and disposition of property. If you are unsure how a particular transfer or retained item should be reported, ask the CDTFA or have a compliance professional review the transaction before filing.
Handle a business sale or ownership change
A seller’s permit is not transferable to a new owner. If you sell the business, notify the CDTFA and close your account; the buyer should check with the CDTFA about obtaining the permit and accounts required for the buyer’s ownership. A change in ownership form, such as moving from a sole proprietorship to a corporation or partnership, can also require closing the old account and obtaining a new permit for the correct owner.
For a sale, coordinate the closeout with the buyer and any escrow process. The CDTFA may need sale documents, including escrow instructions or a bill of sale showing the value of inventory, fixtures, and equipment. Unpaid tax obligations can complicate a transaction, so do not rely on the sale agreement alone to resolve the seller’s account. Confirm the required closeout and any clearance steps with the CDTFA for the specific transaction.
Understand tax duties after closing your account
Account closure does not cancel tax due on activity through the closeout date. You must report sales up to that date, file outstanding returns, and pay amounts owed. A later sale or use of inventory or business property may also have reporting consequences depending on what was purchased, whether tax was paid, and how the property was disposed of. Keep the records that support your final return and closeout.
If you continue making taxable sales after the date you reported, or resume taxable business activity, contact the CDTFA promptly to determine whether you need an active permit or other account and how to report the transactions. The exact treatment depends on the activity and timing. Do not treat a closed account as permission to make taxable sales without the required registration.
Avoid problems from leaving your permit open
If you stop doing business but leave the permit open, the CDTFA may continue to expect returns for the account’s assigned filing periods, including returns reporting no sales where required. Missing returns can leave the account unresolved and may lead to notices, estimated assessments, penalties, or interest depending on the circumstances. An open account can also make it harder to distinguish your final business activity from later periods.
Submit the closure request, file every required return through the final period, and respond to CDTFA notices until the account is confirmed closed and balances are addressed. If you are unsure whether the department has processed the request, check your online account or contact the CDTFA rather than assuming that a submitted form completed the closeout.
Keep records and get closeout help
The CDTFA requires you to keep business records for four years after closing the account. Retain sales and purchase records, filed returns, payment confirmations, inventory records, and documents supporting the sale or disposition of equipment and fixtures. Keep copies of your closeout request and CDTFA correspondence as well. If a particular record is relevant to an audit, dispute, or other legal requirement, confirm whether a longer retention period applies to your situation.
Sales Tax Compliance USA is a done-for-you service staffed by people, not tax software. We can help organize the closeout, review transaction and inventory records, prepare filings, and coordinate questions that need confirmation from the CDTFA. California district taxes vary by delivery address down to street level, so a careful reconciliation of the final sales period matters. The exact position depends on your circumstances; confirm it with the CDTFA or ask us to review the details with you.
Not sure how this applies to your business? We handle US sales tax registration, filing and remittance for ecommerce sellers as a fully managed service, for one fee. Book a free consultation and we will review your own position with you.
California closeout actions: what to do, and what each step does not replace
| Closeout item | What it addresses | What it does not replace |
|---|---|---|
| Online services closure request | Notifies the CDTFA that the account should be closed and provides closeout details | Filing final or overdue returns and paying balances |
| CDTFA-65, Notice of Closeout | Mail-in notice for account closure when online services are not used; captures closure, inventory, and sale information | The final sales and use tax return |
| Final sales and use tax return | Reports sales through the closeout date and relevant taxable transactions, including certain property sales or retained untaxed items | The separate request to close the account |
| Sale or escrow documents | Support the reported sale and values of inventory, fixtures, and equipment where requested | The seller’s responsibility to report and pay amounts due |
| Records retained after closure | Support returns, payments, inventory treatment, and the closeout if questions arise | Any continuing filing or payment duty for later taxable activity |
Frequently asked questions
How do I close my California seller’s permit?
Notify the California Department of Tax and Fee Administration through the CDTFA online services portal, or submit CDTFA-65, Notice of Closeout, by mail if you cannot use online services. File your final and any overdue returns, pay amounts due, and provide information about inventory and any sale of the business or its assets. The CDTFA closes the account after reviewing the request.
How do I close my CDTFA account online?
Sign in to the CDTFA online services portal and follow the instructions to close the relevant account. Provide the requested closeout information and respond if the CDTFA asks for more details. Continue to file required returns and pay balances; the online closure request does not replace those steps.
Do I need to file a final California sales tax return when closing my business?
Yes, you generally must file a final sales and use tax return and any earlier returns that are still outstanding. Report sales through the closeout date, including relevant sales of fixtures or equipment made as part of closing or selling the business. The CDTFA says the final return is normally due on your usual monthly or quarterly filing date; check your account for the applicable due date.
What is CDTFA-65, and when do I use it?
CDTFA-65 is the Notice of Closeout, a form used to give the CDTFA information needed to close accounts and address matters such as security or escrow clearance. Use it as the mail-in closeout route if you do not have access to online services. It does not replace your final return or payment of outstanding amounts.
What happens if I stop doing business but don’t close my seller’s permit?
The CDTFA may continue to expect returns for the account’s assigned filing periods, including returns reporting no sales where required. Unfiled returns can lead to notices and, depending on the circumstances, estimated assessments, penalties, or interest. Contact the CDTFA, submit the closure request, and resolve all required returns and balances.
Do I still owe sales tax after closing my account?
Closing the account does not remove tax due on sales or other taxable activity through the closeout date, nor does it erase unpaid balances or unfiled returns. You may also need to report certain sales of business property or untaxed inventory kept for your own use. Whether a later transaction is taxable depends on its facts, so confirm its treatment with the CDTFA.
How long do I need to keep business records after closing a CDTFA account?
The CDTFA requires business records to be kept for four years after the account is closed. Retain records supporting sales, purchases, returns, payments, inventory, and any sale or disposition of business property. Check whether another legal or business requirement calls for keeping particular records longer.
Do I need a new seller’s permit if I change my business ownership?
A seller’s permit is not transferable to a new owner, and a new owner needs a permit showing the correct ownership. A change in business form can also require closing the old account and obtaining a new permit. Notify the CDTFA and confirm the steps for your specific ownership change.
How we handle this for you
The mechanics in California are manageable on their own; the cost is the time it takes every single filing period, in every state you are registered in. We are a managed service: our team registers you with the California Department of Tax and Fee Administration (CDTFA), prepares and files your returns, and keeps you compliant period after period. You get one point of contact and one invoice — you do not get another dashboard to learn.
See our sales tax compliance services, check where you have obligations with the nexus calculator, or talk to us about California.
Official sources
- https://cdtfa.ca.gov/services/permits-licenses.htm
- https://cdtfa.ca.gov/formspubs/pub74/
- https://cdtfa.ca.gov/formspubs/pub74/notifying-cdtfa.htm
- https://cdtfa.ca.gov/formspubs/cdtfa65.pdf
Reviewed by Paul le Roux, CA(SA). Sales Tax Compliance USA handles US sales tax registration, filing and remittance for cross-border and domestic ecommerce sellers as a fully managed service.
This page is general information for educational purposes and does not constitute legal or tax advice. Sales tax rules change and depend on your specific facts. Consult a qualified tax professional about your own position.
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