Lithium Extraction Excise Tax Guide
Helping businesses succeed is important to the California Department of Tax and Fee Administration (CDTFA). The taxes or fees paid to the state help fund state and local services and programs that are important to our communities.
This guide will help you better understand the Lithium Extraction Excise Tax and the obligations of lithium producers in California.
Lithium Extraction Excise Tax
The lithium extraction excise tax applies to producers per metric ton of lithium carbonate equivalent extracted in California. The tax rate is based on the cumulative total metric tons of lithium carbonate equivalent extracted by a producer from the date the first metric ton of lithium carbonate equivalent was extracted. There are three different tax rates per metric ton based on the cumulative total amount of lithium carbonate equivalent extracted. See the Tax Rates section on our Getting Started tab for more detailed tax rate information.
How the Revenue is Used
The revenues from the lithium extraction excise tax, after state administrative costs, are distributed in two ways. A portion of the revenues are used for Salton Sea restoration projects and grants for community engagement or community-benefit projects at or around the Salton Sea. The remaining funds are disbursed to the counties impacted by lithium extraction activities.
For detailed revenue information, see Revenue and Taxation Code (R&TC) section 47100 and Fish and Game Code section 2951.
How to Use This Guide
The Getting Started tab provides key resources related to registration, filing returns, making payments, account maintenance, and other important information.
The Resources tab provides links to helpful information, including law and regulation information, publications, special notices, and access to assistance from our customer service representatives.
If You Need Help
For assistance with topics included in this guide or other related questions, please contact us by email or by calling our Customer Service Center at 1-800-400-7115 (CRS:711). Customer service representatives are available Monday through Friday from 7:30 a.m. to 5:00 p.m. (Pacific time), except state holidays. Additional contact information and hours of operation are available on our How to Contact Us webpage.
If you have suggestions for improving this guide, please contact us by email.
If you are currently extracting lithium in this state or plan to begin lithium extraction in 2023, contact us by calling our Customer Service Center at 1-800-400-7115 (CRS:711) for registration assistance. Customer service representatives are available Monday through Friday from 7:30 a.m. to 5:00 p.m. (Pacific time), except state holidays.
Who is Required to Register?
You must register with us for a Lithium Excise Tax Permit, file tax returns, and pay the applicable tax to us if you are a person (producer) extracting lithium from:
- Geothermal fluid,
- Spodumene ore,
- Clay, or
- Any other naturally occurring substance.
For 2023 and 2024, the lithium extraction tax rates are as follows:
|Lifetime cumulative metric tons of lithium carbonate equivalent extracted by a producer:||Applicable tax rate (per metric ton extracted):|
|20,000 or less||$400|
|Over 20,000 but not over 30,000||$600|
- If ownership of an existing site changes, the cumulative amount of lithium carbonate equivalent extracted previously reported for that site is assumed to be 30,000 metric tons. The tax rate applied to the new ownership account is $800 per metric ton.
- The lithium extraction excise tax rate is set by statute (R&TC section 47010(a). Beginning January 1, 2025, and every January thereafter, we will adjust the lithium extraction excise tax rate based on changes in the California Consumer Price Index.
Lithium Conversion Equivalents
Lithium and lithium compounds extracted must be converted to the lithium carbonate equivalent by multiplying the tonnage of lithium and lithium compounds by the appropriate conversion factor as listed below:
|Lithium or lithium compound:||Conversion factor for the lithium carbonate equivalent:|
|Lithium oxide (Li2O)||2.473|
|Lithium chloride (LiCl)||0.871|
|Lithium bromide (LiBr)||0.425|
|Lithium hydroxide monohydrate (LiOH·H2O)||0.880|
|Lithium carbonate (Li2CO3)||1.000|
Your Lithium Excise Tax Return and payment are due on or before the last day of the month following each reporting period. You are required to electronically file a return even if you do not have any reportable activity during the reporting period. Returns must be electronically filed and received by the due date to be considered timely, even if no amount is owed. If the due date falls on a Saturday, Sunday, or state holiday, returns received by the next business day will be considered timely.
Filing a late return and/or late payment may result in a late penalty and/or interest assessment. See Penalty and Interest topic in this section.
File a Return Online – File your return and pay your taxes through our online services. Log in using your username and password and select the account for which you wish to file a return. Then select the File a Return link for the filing period you wish to file and follow the prompts.
If you do not have a username and password, select the Sign Up Now link under the Create a Username heading from the online services homepage.
Visit our Tutorials page for instructions on how to file your Lithium Excise Tax returns through our online services.
Payments must be submitted by the due date to be considered timely.
Make a Payment – Payments may be submitted through our online services. Log in using your username and password and select the account for which you wish to make a payment. Select the More link under the I Want To section. Then select the Make a Payment link and follow the prompts.
If your average monthly tax payment is $20,000 or more, you are required to pay by Electronic Funds Transfer (EFT). We will notify you in writing if you are required to pay your taxes by EFT.
For an EFT payment to be timely, it must be initiated on or before the filing due date and funds must settle into CDTFA's bank account on or before the banking day following the due date. Some EFT payments made on the return's due date may need to be initiated before 3:00 p.m. (Pacific time) to be received timely. For more information regarding EFT payments, please see our EFT FAQs.
Penalty and Interest
The penalty for filing a late return or making a late tax payment is ten percent of the tax amount due for the period. Interest also applies to late tax payments.
You may log into your account to submit an online request for an extension to file a return or relief from penalty (including interest due to a disaster).
You must retain records for at least four years from the time the tax is due unless we give you written authorization to destroy them sooner. For additional information regarding record retention, please see Regulations 3501 and 4901.
Updating Your Business Information
Update Business Information Online – Update your business information through our online services. Log in using your username and password and select the account you want to update. Select the More under the I Want To section. Then select the option you are requesting to update under Account Maintenance.
Laws and Regulations
Related Web Sites
- Department of Conservation (DOC) – Division of Mine Reclamation (DMR)
- DOC – State Mining and Geology Board (SMGB)
- Salton Sea Management Program (SSMP)
Other Helpful Resources
- Senate Bill 125, chapter 63, Statutes of 2022
Other Helpful Resources
- Contact Us – A listing of CDTFA contacts for your questions and concerns.
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- Videos and How-To Guides – These resources will help you avoid common mistakes, file your tax returns online, and more.
- Online Services – Learn about the online services CDTFA offers.
- Office Locations and Addresses – A comprehensive listing of all CDTFA offices and contact information.
- Get It In Writing! – Tax and fee laws can be complex, and you are encouraged to put your tax questions in writing. You may send your request to: Special Taxes and Fees, MIC:31, California Department of Tax and Fee Administration, P.O. Box 942879, Sacramento, CA 94279-0031.
- Taxpayers' Rights Advocate (TRA) – The TRA Office helps taxpayers when they are unable to resolve a matter through normal channels, such as speaking to a supervisor, or when there are apparent rights violations.
- GO-Biz – The Governor's Office of Business and Economic Development offers extensive information on state, local, and federal permit requirements. For a listing of their assistance centers, visit their website.
- CalGold – Provides help with permit and licensing requirements on other state, federal, and local authorities. For example, you may need to register with the Franchise Tax Board or the Employment Development Department. You may also want to consult with a tax professional or your local city and county authorities for assistance regarding other agencies' requirements or restrictions.
- California's Tax Service Center – A one-stop tax help and resource website that guides taxpayers to forms and services they need.