California State Tax
CDTFA Notice of Determination: California Sales Tax Bill (2026)
The short answer: a CDTFA Notice of Determination is California's official bill for sales or use tax the California Department of Tax and Fee Administration (CDTFA) says you owe — usually after an audit. You generally have 30 days from the notice date to pay or file a petition for redetermination before it becomes final.
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⏱ Your deadline: 30 days from the date printed on the notice to file a petition for redetermination. Miss it and the determination becomes final — a 10% finality penalty can be added, interest keeps building, and your right to dispute the bill is generally gone.
Why you got a CDTFA Notice of Determination
The CDTFA reviewed your account and decided you owe more sales or use tax than you paid. The notice shows the periods involved, the tax amount, and added penalties and interest. There are a few common reasons it lands in your mailbox:
- You were audited. A CDTFA sales tax audit found underreported sales, missing resale certificates, or differences between your returns and your bank deposits or federal income tax filings.
- You filed a return but didn't pay in full. The CDTFA bills the unpaid balance plus penalties.
- You didn't file at all. The CDTFA can estimate your tax and issue a determination based on its own figures.
- Use tax on out-of-state purchases. Equipment or inventory bought without paying California tax can trigger a determination.
If the notice came after an audit, it may be labeled a Notice of Deficiency Determination. The label differs, but the 30-day clock and the consequences are the same.
What happens if you ignore it
The CDTFA's collection process is automated and it moves on a schedule. Once the 30-day window closes and the determination is final, here is the path it follows:
- Notice of Determination — the bill. You are here. You can still petition.
- Determination becomes final — after 30 days with no petition or payment. A 10% finality penalty can be added on top of existing penalties and interest.
- Demand for payment — the CDTFA formally demands the full balance.
- State Tax Lien — the CDTFA records a lien against your business and, where applicable, you personally. It hits your credit and clouds any property you own.
- Levies and seizures — the CDTFA can issue bank levies, garnish accounts receivable, take a Notice to Withhold from customers, and in serious cases revoke your seller's permit, shutting the business down.
One detail catches many business owners off guard: the sales tax you collect from customers is treated as trust-fund money you hold for the state. That means owners, officers, and other "responsible persons" can be held personally liable for the business's unpaid sales tax — even with a corporation or LLC. Ignoring the notice doesn't keep the debt inside the company.
First: make sure the determination is actually right
Audit determinations are estimates, and estimates can be high. Before you accept the number, look closely:
- Check the audit method. CDTFA auditors often use markup tests, sample periods, or observed sales to project a full liability. A flawed sample or a single bad month can inflate the whole bill.
- Look for missing credits. Exempt sales, sales for resale, returned goods, and bad debts may not have been counted.
- Match the periods. Confirm the tax periods on the notice line up with what you actually reported and paid.
- Screen for scams. A real notice comes by mail from the CDTFA, and payment goes only to the state through official channels — never gift cards, wire transfers, or payment apps. Verify any balance through your CDTFA online account before paying.
If the math looks wrong, that's exactly what the petition for redetermination is for. The CDTFA explains your rights and the appeals process at cdtfa.ca.gov, and the Taxpayers' Rights Advocate Office can help if you feel the process has gone off the rails.
If you can't pay the CDTFA Notice of Determination: your real options
Whether you dispute the amount or accept it, you have more than the "pay now" choice the notice implies:
- Petition for redetermination — file within 30 days to dispute or reduce the bill. A timely petition pauses collection on the disputed amount and can route your case to an appeals conference and, if needed, the independent Office of Tax Appeals.
- Payment plan — a CDTFA payment plan spreads the balance over monthly installments so collection stops while you pay it down.
- Offer in Compromise — if your business is closed or your finances genuinely can't cover the debt, the CDTFA may accept less than the full balance. This is a real program, not a shortcut — anyone promising to settle for "pennies on the dollar" before reviewing your finances is selling you something.
- Penalty relief — penalties may be reduced for reasonable cause, such as illness, disaster, or circumstances beyond your control.
For the full menu of strategies across agencies, see our guide to resolving California back sales tax.
How to respond, step by step
- Note the petition deadline. Find the date on the notice and count 30 days. Put it on your calendar today.
- Review the determination against your records, returns, and (if you were audited) the auditor's workpapers.
- If you disagree: file a petition for redetermination in writing before the deadline. State the periods, the amounts you dispute, and why. Keep proof of mailing.
- If the amount is correct but you can't pay: request a payment plan or explore an Offer in Compromise before the determination goes final.
- If you have unfiled periods or a personal-liability exposure: get an experienced tax professional to review the file first — the order you handle returns, the audit, and the balance changes what you ultimately pay.
CDTFA Notice of Determination questions, answered
Is a CDTFA Notice of Determination serious?
Yes — it's a formal sales or use tax assessment that becomes legally final if you don't pay it or file a petition for redetermination within 30 days. Once it's final, the CDTFA can record a lien, levy your bank account, and pursue your business. The good news is that 30-day window gives you real appeal rights, but only if you act before it closes.
What is the deadline to respond to a CDTFA Notice of Determination?
You generally have 30 days from the date printed on the notice to file a petition for redetermination if you disagree with the amount. If you miss that deadline, the determination becomes final, a 10% finality penalty can be added, and your right to dispute the assessment in most cases is lost.
What if I can't pay the CDTFA Notice of Determination?
You still have options. You can file a petition for redetermination to dispute or reduce the amount, request a payment plan to spread the balance over monthly installments, or — depending on your situation — apply for an Offer in Compromise. Filing a petition on time also pauses collection on the disputed amount while your case is reviewed.
What is the difference between a Notice of Determination and a Notice of Deficiency Determination?
They are closely related. A Notice of Determination is the CDTFA's bill for tax it says you owe — often after an audit or because a return was filed without full payment. A Notice of Deficiency Determination is the specific type issued when an audit finds you underreported tax. Both carry the same 30-day petition deadline and the same collection consequences if ignored.
Can the CDTFA come after me personally for my business's sales tax?
Yes. Sales tax you collect from customers is considered trust-fund money held for the state. Under California law, responsible individuals — owners, officers, or others who controlled the money — can be held personally liable for unpaid sales tax even if the business is a corporation or LLC. That makes responding to a Notice of Determination especially important.
This guide is general information, not tax or legal advice for your specific situation. Eligibility for IRS and California tax programs depends on individual facts and circumstances; no outcome is guaranteed.