How do I close my business accounts with the FTB and CDTFA when I dissolve my California business?

To close your business accounts, you must file final tax returns with both the Franchise Tax Board (FTB) and the California Department of Tax and Fee Administration (CDTFA) and formally request account closure. Here is a step-by-step guide to properly close your state tax accounts. Step 1: Formally Dissolve Your Business Before closing tax accounts, you must first dissolve your legal business entity. File the appropriate dissolution, surrender, or cancellation documents with the California Secretary of State. This action formally signals your intent to cease operations. Step 2: File Your Final FTB Tax Return You must file a final California state income or franchise tax return with the FTB for the last year of business. Clearly mark the "Final Return" box on the form. This return is due by the 15th day of the 4th month after your business formally closes. You must pay all taxes due, including any minimum franchise tax for the final year. Step 3: File Your Final CDTFA Sales and Use Tax Return File your final sales and use tax return with the CDTFA. This must be done within 10 days of your official business closing date. You can file this return online using your CDTFA eServices account. Step 4: Close Your CDTFA Seller's Permit After filing your final return, you must formally close your seller's permit and any other CDTFA accounts. You can submit this request online through your CDTFA eServices account or by completing and mailing Form CDTFA-65, Notice of Close-Out. Important Details and Nuances: You must pay all outstanding tax liabilities, including penalties and interest, to both agencies before they will consider your accounts fully closed. Remember to also notify other relevant agencies, such as the Employment Development Department (EDD) if you had employees, and any local city or county business licensing offices. Keep all business and tax records for at least seven years after closing. Warnings and Limitations: Failure to properly file final returns and close accounts can result in ongoing tax assessments, late fees, and penalties. Business owners can sometimes be held personally liable for certain unpaid business taxes, especially sales tax, even after the entity has been dissolved. This is general information and does not constitute legal advice. For complex situations, or if your business has significant outstanding liabilities, consult with a qualified California attorney or tax professional.