California businesses face several specific penalties for late sales tax filings and non-payments, including:

1. Late Filing Penalty: A penalty of 10% of the unpaid tax is assessed if the sales tax return is filed after the due date.

2. Additional Penalty for Extended Delays: If the return is more than one month late, an additional 10% penalty may be imposed.

3. Late Payment Penalty: An additional penalty of 5% of the unpaid tax may be applied for not paying the owed sales tax by the deadline.

4. Interest Charges: Interest accrues on both unpaid taxes and penalties from the original due date until full payment is made, increasing the total amount owed.

5. Fines: California may impose flat fines for severe or repeated non-compliance.

6. Liens and Garnishments: The CDTFA can place liens on business assets or garnish bank accounts to recover unpaid taxes.

7. Suspension of Seller’s Permit: Persistent non-payment and late filings can result in the suspension or revocation of the business’s seller’s permit.

8. Legal Action: In extreme cases, the state may pursue legal action against the business, leading to further financial and operational repercussions.

9. Increased Audits: Non-compliant businesses may face more frequent and thorough audits, increasing the risk of uncovering additional compliance issues.

Avoidance Strategies:

• Timely Filing and Payment: Adhere to filing schedules and remit taxes by the due dates.

• Use Accounting Software: Implement software to automate tax calculations and reminders for filing deadlines.

• Maintain Accurate Records: Keep detailed and organized records of all sales transactions and taxes collected.

• Consult Tax Professionals: Engage with tax advisors to ensure compliance and accurate filings.

• Monitor Deadlines: Set up calendar reminders and alerts for upcoming filing and payment deadlines.

By following these strategies, businesses can avoid penalties, maintain compliance, and ensure smooth sales tax operations in California.