Distilled Spirits Tax Return

The California Department of Tax and Fee Administration (CDTFA) administers the California Alcoholic Beverage Tax Law (Revenue and Taxation Code section 32001 et seq.) on behalf of the Board of Equalization. The law includes the state excise tax on distilled spirits. Sellers of distilled spirits must pay the excise tax when they sell directly to a California retailer. Distilled spirits are presumed to be sold, and the alcoholic beverage tax is due when they are sold to in-state retailers or to consumers if sold by licensed craft distillers, unless the distilled spirits:

• Are still in the possession of the licensee.
• Have been sold or delivered to another licensed distilled spirits manufacturer, rectifier, importer, or wholesaler.
• Have been exported outside of California, or sold for export by the licensee and actually exported from California within 90 days from the date of sale.
• Have been lost through unintentional destruction prior to the termination of possession.
• Have been lost through an unaccounted-for loss prior to the termination of possession. The unaccounted-for loss shall not exceed the tolerance set forth in section (b) of Regulation 2550, Destruction and Unaccounted for Losses of Distilled Spirits.
• Are otherwise exempt from taxation.

The tax rates as they relate to the different categories of distilled spirits are located on the tax rates page for Special Taxes and Fees, under Alcoholic Beverage Tax.

Filing Requirements

Every licensed distilled spirits taxpayer is required to electronically file a CDTFA-501-DS,Distilled Spirits Tax Return and applicable supplemental schedules of all sales of distilled spirits for the reporting period, on or before the 15th day of each month, following the reporting period (Regulation 2535). You must file a return each reporting period even if no tax is due. Payment for the amount due must be submitted by the due date of the return. Licensees must keep a copy of CDTFA-501-DS and supplemental schedules (if applicable) on the licensed premises for verification by our auditors.

Penalty and Interest

The following penalty charges may be assessed for filing a late return and/or late payment:

• Late-file penalty – Fifty dollars ($50) if the tax return is not filed by the due date.
• Late-pay penalty – Ten percent (10%) of the tax amount due if the tax is not paid by the due date.
• Late-file and late-pay penalty – Ten percent (10%) or fifty dollars ($50), whichever is greater, if the tax return is not filed and paid by the due date.

Interest also applies to late payments for each month or fraction of a month that the payment is late. (Revenue and Taxation Code 32252)

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Initial Questions

Did you receive bottled or packaged distilled spirits from your own bottling or packaging department during this reporting period? (CDTFA-240-A)

If you received bottled or packaged distilled spirits from your own bottling or packaging department during this reporting period, select Yes.

If you did not receive bottled or packaged distilled spirits from your own bottling or packaging department during this reporting period, select No.

Did you purchase or receive bottled or packaged distilled spirits from other licensed distilled spirits manufacturers, importers, or wholesalers in California during this reporting period? (CDTFA-241-A)

Note: Returns from California wholesalers should be included in CDTFA-241-A, Distilled Spirits Purchased or Received from Other Licensed Distilled Spirits Manufacturers, Importers, or Wholesalers in California (schedule).

If you purchased or received bottled or packaged distilled spirits from licensed distilled spirits manufacturers, importers, or wholesalers in California during this reporting period, select Yes.

If you did not purchase or receive bottled or packaged distilled spirits from licensed distilled spirits manufacturers, importers, or wholesalers in California during this reporting period, select No.

Did you import bottled or packaged distilled spirits into California during this reporting period? (CDTFA-242-A)

Note: Returns from out-of-state should be included in CDTFA-242-A, Distilled Spirits Imported into California (schedule).

If you imported bottled or packaged distilled spirits into California during this reporting period, select Yes.

If you did not import bottled or packaged distilled spirits into California during this reporting period, select No.

Did you make sales or deliver bottled or packaged distilled spirits to other licensed distilled spirits manufacturers, importers, or wholesalers in California during this reporting period? (CDTFA-243-B)

Note: This should not include sales to California retailers. Sales to California retailers are considered taxable transactions and should be reported as sales.

If you made sales or delivered bottled or packaged distilled spirits to other licensed distilled spirits manufacturers, importers, or wholesalers in California during this reporting period, select Yes.

If you did not make sales or deliver bottled or packaged distilled spirits to other licensed distilled spirits manufacturers, importers, or wholesalers in California during this reporting period, select No.

Did you have any sales of bottled or packaged distilled spirits that were exempt from the California alcoholic beverage excise tax due to the following: (CDTFA-244-B)

• Distilled spirits were exported
• Distilled spirits were sold to common carriers
• Distilled spirits were sold to armed forces instrumentalities

If you had sales of bottled or packaged distilled spirits that were exempt from the California alcoholic beverage excise tax due to one of the reasons listed above, select Yes.

If you did not have sales of bottled or packaged distilled spirits that were exempt from the California alcoholic beverage excise tax due to one of the reasons listed above, select No.

How would you like to add the CDTFA-240-DS, Distilled Spirits Transaction Schedules to your return?

If you would like to manually add each transaction to the schedule(s), select Manually and click the Next button.

If you would like to upload an excel template of the CDTFA-240-DS schedule(s), select Upload an Excel Workbook. Under the Upload your Schedule(s) section, click the Upload Schedule button to upload the excel file.

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Every distilled spirits manufacturer, manufacturer's agent, brandy manufacturer, and rectifier shall keep and preserve a record of all distilled spirits produced, manufactured, cut, blended, rectified, bottled, packaged, or otherwise acquired in California. All distilled spirits received from the licensee's own bottling or packaging department must be reported on CDTFA-240-A, Distilled Spirits Received from Own Bottling or Packaging Department (schedule). Licensees must keep a copy of CDTFA-240-A for verification by our auditors. Receipts from the bottling or packaging department must include all distilled spirits bottled or packaged, whether or not the distilled spirits are owned by the licensee. (Regulation 2504)

To manually complete CDTFA-240-A (schedule), select Add a Record and enter the schedule information (refer to the Schedule Information section below for more information).

If you uploaded your CDTFA-240-A (schedule) using CDTFA-240-DS excel workbook, review the transactions, and correct any errors, if applicable.

Schedule Information

Who the Product was Bottled or Packaged For (Owner's Name). Enter the complete name of the person or business the distilled spirits were bottled or packaged for.

Date Bottled or Packaged. Enter the date the distilled spirits were bottled or packaged.

Street. Enter the street address of the person or business the distilled spirits were bottled or packaged for.

City. Enter the city of the person or business the distilled spirits were bottled or packaged for.

State. Select the state of the person or business the distilled spirits were bottled or packaged for.

Zip Code. Enter the ZIP Code of the person or business the distilled spirits were bottled or packaged for.

Click Here to Verify Address. Click the button to verify the inputted address. Once the address is verified, click the Save button.

100 Proof and Under (Gallons). Enter the total gallons of bottled or packaged distilled spirits 100 proof and under. The total must agree with the respective federal forms.

Over 100 Proof (Gallons). Enter the total gallons of bottled or packaged distilled spirits over 100 proof. The total must agree with the respective federal forms

Note: You must report all alcoholic beverages in wine gallons (Alcoholic Beverage Tax Regulation 2544). You can convert liters to wine gallons by multiplying liters by 0.264172. Round the resulting figure to the nearest one-hundredth of a gallon (for example, round 1.2345 to 1.23).

Once you have completed the information for the entry, select Add to save the entry and return to the Schedule 240-A screen. To add additional entries, select Add a Record or select Next to continue.

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You must report the following on CDTFA-241-A (schedule):

• All bottled or packaged distilled spirits purchased or received from other licensed distilled spirits manufacturers, importers, or wholesalers in California
• All bottled or packaged distilled spirits received from the licensee's own branches in California
• Returns from California wholesalers

Licensees must keep a copy of CDTFA-241-A for verification by our auditors. (Regulation 2505)

To manually complete CDTFA-241-A (schedule), select Add a Record and enter the schedule information (refer to the Schedule Information section below for more information).

If you uploaded your CDTFA-241-A (schedule) using the CDTFA-240-DS excel workbook, review the transactions, and correct any errors, if applicable.

Schedule Information

Purchased From (name of Distilled Spirits Manufacturer, Importer, or Wholesaler). Enter the complete name of the California seller the bottled or packaged distilled spirits were purchased from.

City. Enter the name of the California city where the seller's business is located.

Distilled Spirits' CDTFA Account Number. Enter the seller's nine-digit distilled spirits CDTFA account number. (Note: Input numbers only. Omit letters and dashes.)

A list of active Distilled Spirits Manufacturer, Importer, or Wholesaler accounts can be located on our Online Services, under the Registration section.

Date Received. Enter the date the shipment was received.

Invoice Number. Enter the shipment's invoice number.

Invoice Date. Enter the shipment's invoice date.

100 Proof and Under (Gallons). Enter the total gallons of bottled or packaged distilled spirits 100 proof and under contained in the shipment.

Over 100 Proof (Gallons). Enter the total gallons of bottled or packaged distilled spirits over 100 proof contained in the shipment.

Note: You must report all alcoholic beverages in wine gallons (Alcoholic Beverage Tax Regulation 2544). You can convert liters to wine gallons by multiplying liters by 0.264172. Round the resulting figure to the nearest one-hundredth of a gallon (for example, round 1.2345 to 1.23).

Once you have completed the information for the entry, select Add to save the entry and return to the Schedule 241-A screen. To add additional entries, select Add a Record or select Next to continue.

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You must report all bottled or packaged distilled spirits acquired by direct importation from out-of-state or from the Foreign Trade Zone on CDTFA-242-A, Distilled Spirits Imported into California. You must report importation of bonded distilled spirits into California at the time of importation and not at the time of withdrawal from bond. Returns from out-of-state should also be included on CDTFA-242-A. Licensees must keep a copy of CDTFA-242-A for verification by our auditors. (Regulation 2506)

To manually complete CDTFA-242-A (schedule), select Add a Record and enter the schedule information (refer to the Schedule Information section below for more information).

If you uploaded your CDTFA-242-A (schedule) using the CDTFA-240-DS excel workbook, review the transactions, and correct any errors, if applicable.

Schedule Information

Shipper's Name. Enter the complete name of the shipper. Generally, the shipper is the individual or business that initiated the shipment into California. Oftentimes this will be the information of the individual or business you purchased the bottled or packaged distilled spirits from.

Shipper's Country. Select the name of the country from which the shipment originated.

Shipper's State. If the state from which the shipment originated is within the United States, select the name of the state.

Name of Common Carrier. Enter the name of the common carrier transporting the shipment into California.

Common Carrier's CDTFA Account Number. Enter the common carrier's nine-digit CDTFA account number. (Note: Numbers only. Omit letters and dashes.)

A list of active Alcohol Common Carrier accounts can be located on our Online Services, under the Registration section.

Mode Code. Select the mode code for the shipment being reported.

Codes: J = Truck, R = Railcar, S = Ship

Truck, Railcar, or Ship Information. If the shipment entered California via:

• Truck – Enter the U.S. Department of Transportation (USDOT) number assigned to the truck.
• Railcar – Enter the railcar initials, followed by the railcar number (for example, combine railcar initials WXYZ with railcar number 45678 = WXYZ45678).
• Ship/Vessel – Enter the name of the vessel, followed by the steamship bill of lading number (for example, combine vessel name ABCD with steamship bill of lading number 1234V = ABCD1234V).

Waybill, Bill of Lading, or Freight Bill Number. Enter the waybill, bill of lading, or freight bill number.

Waybill, Bill of Lading, or Freight Bill Date. Enter the waybill, bill of lading, or freight bill date.

Date Received. Enter the date the shipment was received.

Purchased From. Enter the complete name of the person or business you purchased the bottled or packaged distilled spirits from.

Invoice Number. Enter the shipment's invoice number.

100 Proof and Under (Gallons). Enter the total gallons of bottled or packaged distilled spirits 100 proof and under contained in the shipment.

Over 100 Proof (Gallons). Enter the total gallons of bottled or packaged distilled spirits over 100 proof contained in the shipment.

Note: You must report all alcoholic beverages in wine gallons (Alcoholic Beverage Tax Regulation 2544). You can convert liters to wine gallons by multiplying liters by 0.264172. Round the resulting figure to the nearest one-hundredth of a gallon (for example, round 1.2345 to 1.23).

Once you have completed the information for the entry, select Add to save the entry and return to the Schedule 242-A screen. To add additional entries, select Add a Record or select Next to continue.

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You must report the following on CDTFA-243-B (schedule):

• All bottled or packaged distilled spirits you sold or delivered to other licensed distilled spirits manufacturers, importers, or wholesalers in California
• All bottled or packaged distilled spirits you transferred to licensee's own branches in California
• All bottled or packaged distilled spirits you returned to original vendors in California

Note: You should not include sales to California retailers. Sales to California retailers are considered taxable transactions and should be reported as sales.

Licensees must keep a copy of CDTFA-243-B, Claim for Distilled Spirits Excise Tax Exemption on Sale or Delivery to Other Licensed Distilled Spirits Manufacturers, Importers, or Wholesalers in California, for verification by our auditors. (Regulation 2507(a))

To manually complete CDTFA-243-B (schedule), select Add a Record and enter the schedule information (refer to the Schedule Information section below for more information).

If you uploaded your CDTFA-243-B (schedule) using the CDTFA-240-DS excel workbook, review the transactions, and correct any errors, if applicable.

Schedule Information

Sold To. Enter the complete name of the California purchaser the bottled or packaged distilled spirits were sold to.

City. Enter the name of the California city where the bottled or packaged distilled spirits were delivered to.

Distilled Spirits’ CDTFA Account Number. Enter the nine-digit purchaser's distilled spirits CDTFA account number. (Note: Numbers only. Omit letters and dashes.)

Invoice Number. Enter the shipment's invoice number.

Invoice Date. Enter the shipment's invoice date.

Date Shipped. Enter the date the shipment was shipped.

100 Proof and Under (Gallons). Enter the total gallons of bottled or packaged distilled spirits 100 proof and under contained in the shipment.

Over 100 Proof (Gallons). Enter the total gallons of bottled or packaged distilled spirits over 100 proof contained in the shipment.

Note: You must report all alcoholic beverages in wine gallons. You can convert liters to wine gallons (Alcoholic Beverage Tax Regulation 2544) by multiplying liters by 0.264172. Round the resulting figure to the nearest one-hundredth of a gallon (for example, round 1.2345 to 1.23).

Once you have completed the information for the entry, select Add to save the entry and return to the Schedule 243-B screen. To add additional entries, select Add a Record or select Next to continue.

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You must report the following on CDTFA-244-B (schedule):

• All bottled or packaged distilled spirits you exported from California
• All bottled or packaged distilled spirits you sold for export, and actually exported from California
• All bottled or packaged distilled spirits you sold to common carriers engaged in interstate or foreign passenger service
• All bottled or packaged distilled spirits you sold to instrumentalities of the armed forces

Licensees must keep a copy of CDTFA-244-B, Claim for Excise Tax Exemption on Distilled Spirits Exported or Sold to Common Carriers or Armed Forces Instrumentalities, for verification by our auditors. (Regulation 2507(b)).

To manually complete CDTFA-244-B (schedule), select Add a Record and enter the schedule information (refer to the Schedule Information section below for more information).

If you uploaded your CDTFA-244-B (schedule) using the CDTFA-240-DS excel workbook, review the transactions, and correct any errors, if applicable.

Schedule Information

Shipped To (Name of Consignee). Enter the complete name of the shipment's consignee.

Country. Select the name of the country where the shipment is being delivered.

State. If the state where the shipment is being delivered is within the United States, select the name of the state.

Name of Carrier. Enter the name of the carrier transporting the shipment out of California.

Bill of Lading or Freight Bill Number. Enter the bill of lading or freight bill number.

Invoice Number. Enter the shipment's invoice number.

Invoice Date. Enter the shipment's invoice date.

100 Proof and Under (Gallons). Enter the total gallons of bottled or packaged distilled spirits 100 proof and under contained in the shipment.

Over 100 Proof (Gallons). Enter the total gallons of bottled or packaged distilled spirits over 100 proof contained in the shipment.

Note: You must report all alcoholic beverages in wine gallons (Alcoholic Beverage Tax Regulation 2544). You can convert liters to wine gallons by multiplying liters by 0.264172. Round the resulting figure to the nearest one-hundredth of a gallon (for example, round 1.2345 to 1.23).

Once you have completed the information for the entry, select Add to save the entry and return to the Schedule 244-B screen. To add additional entries, select Add a Record or select Next to continue.

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(Round the resulting figure to the nearest one-hundredth of a gallon [for example, round 1.2345 to 1.23])

Total Beginning Inventory

Beginning inventory (same as previous reporting period's ending inventory). The value in this field should include bottled or packaged distilled spirits 100 proof and under inventory on your own premises, and in public and private warehouses. The system automatically populates the field with the value that was entered as the ending inventory on your previous period's return.

Override beginning inventory box: Only select this box if you are amending multiple returns. Your beginning inventory must always match your ending inventory for the previous period's return.

Received from own bottling or packaging department (total from CDTFA-240-A). The system will automatically calculate this field. The number in this field represents the total gallons of bottled or packaged distilled spirits 100 proof and under you received from your own bottling or packaging department as reported on your CDTFA-240-A, Distilled Spirits Received from Own Bottling or Packaging Department (schedule).

Purchased or received from other licensed distilled spirits manufacturers, importers, or wholesalers in California (total from CDTFA-241-A). The system will automatically calculate this field. The number in this field represents the total gallons of bottled or packaged distilled spirits 100 proof and under you purchased or received from other California licensed distilled spirits manufacturers, importers, or wholesalers as reported on your CDTFA-241-A, Distilled Spirits Purchased or Received from Other Licensed Distilled Spirits Manufacturers, Importers, or Wholesalers in California (schedule).

Note: Returns from California wholesalers should be included in CDTFA-241-A (schedule).

Imported into California (total from CDTFA-242-A). The system will automatically calculate this field. The number in this field represents the total gallons of bottled or packaged distilled spirits 100 proof and under you acquired by direct importation from out-of-state or from the Foreign Trade Zone as reported on your CDTFA-242-A, Distilled Spirits Imported into California (schedule).

Note: Returns from out-of-state should be included in CDTFA-242-A (schedule).

Note: You must report importation of bonded bottled or packaged distilled spirits into California at the time of importation and not at the time of withdrawal from bond.

Returns from California retailers (do not include returns from wholesalers or returns from out-of-state). Enter the total gallons of bottled or packaged distilled spirits returned from California retailers. Wholesalers and rectifiers may accept the return of bottled or packaged distilled spirits 100 proof and under from retailers, provided the distilled spirits were sold to the retailer by the wholesaler or rectifier. Do not include returns from wholesalers or returns from out-of-state.

Unaccounted-for gains (disclosed by physical inventory). Enter the gains of distilled spirits 100 proof and under disclosed from taking a physical inventory.

Total accounted-for. The system will automatically calculate this field. The number in this field represents the total accounted-for inventory of distilled spirits 100 proof and under for this reporting period.

Total Ending Inventory

Total sales. Enter the total gallons of bottled or packaged distilled spirits 100 proof and under sold during this reporting period.

Unintentional destruction supported by affidavits (reference Regulation 2550(a) for additional information). Enter the total gallons of bottled or packaged distilled spirits 100 proof and under that qualify as unintentional destruction. Unintentional destruction shall mean destruction of bottled or packaged distilled spirits by fire, earthquake, floods, breakage in transit, accident, or by any other cause when the exact quantity destroyed is known. Claims for loss by reason of unintentional destruction are to be submitted via email to unintentionaldestruction@cdtfa.ca.gov and must be submitted to CDTFA immediately following the close of business on the last day of the month in which the loss is discovered. The claim must state under oath of the licensee that the distilled spirits were so damaged that they could not be used for any purpose. Proof of loss satisfactory to CDTFA in the form of insurance or carrier claims, which have been paid, must be included when the claim is submitted to CDTFA. Credit is only allowed if a claim was previously submitted with the required proof of loss to CDTFA, and should be attached to the return.

Refer to the Attachments section below for instructions on how to upload supporting documentation.

Unaccounted-for losses (reference Regulation 2550(b) for additional information). Enter the total gallons of bottled or packaged distilled spirits 100 proof and under that qualify as an unaccounted-for loss. Unaccounted-for losses shall include all other losses disclosed by physical inventory due to pilferage, handling, among others. The allowable tolerance for unaccounted-for losses of bottled or packaged distilled spirits 100 proof and under acquired by any distilled spirits taxpayer cannot exceed one-tenth of one percent of total sales of distilled spirits 100 proof and under.

Inventory, end of reporting period. Enter the total gallons of bottled or packaged distilled spirits 100 proof and under held in inventory at the end of this reporting period.

Total accounted-for. The system will automatically calculate this field. The number in this field represents the total accounted-for inventory of distilled spirits 100 proof and under for this reporting period.

Semi-Annual Inventory

(Only applicable to June and December reporting periods)

I did not report any inventory. Only select this box if no bottled or packaged distilled spirits 100 proof and under are held in inventory; no inventory reported for this reporting period.

Physical inventory of bottled or packaged distilled spirits (required semi-annually). Enter the total gallons of bottled or packaged distilled spirits 100 proof and under disclosed from taking a physical inventory. A physical inventory of the number of gallons of bottled or packaged distilled spirits must be reported semi-annually in June and December. For taxpayers on an annual reporting basis, a physical inventory must be reported on an annual basis in December (Regulation 2530).

Semi-annual inventory date. Enter the date in June or December the physical inventory was taken.

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Inventory Reconciliation Over 100 Proof

Transactions 100 Proof and Under

Transactions Over 100 Proof

Attachments

Resources