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If a customer pays after the tax reporting period, or pays in installments, when is the tax due?

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If a customer pays after the tax reporting period, or pays in installments, when is the tax due?

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If a retailer is on the accrual basis of accounting, tax is due based on the date the sale takes place. A retailer on the cash basis of accounting will report a sale when payment is received from the customer. See Rule 3.302.

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Tax is due for the period in which the sale takes place–when a customer takes possession of or title of an item. This is true whether you receive payment at that time or at a later date. Accordingly, you must report credit or charge sales for the period in which they occur, regardless of when you receive payment. Lease payments, however, are treated differently. They are generally reported for the period in which you receive them, regardless of when the taxable lease began. You would not report any unpaid lease balances due. (Different rules apply to leases of trucks, aircraft, and other mobile transportation equipment.) For detailed information on leases, please refer to Regulation 1660, Leases of Tangible Personal Property–In General, or Regulation 1661, Leases of Mobile Transportation Equipment or Publication 46, Tax Tips for Leasing of Tangible Personal Property in California. If you report a charge or credit sale and later find you cannot collect payment for it, you may be able

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