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BOE-401-INST REV. 13 (4-13)

STATE OF CALIFORNIA

BOARD OF EQUALIZATION

Line 4. Returned Taxable Merchandise

Enter amounts you credited or refunded to customers for returned taxable merchandise, as described below.

You can take this deduction only if:

• You returned or credited to your customer the full sales price, including sales tax charges, and

• The customer, in order to obtain the refund or credit, is not required to purchase other property at a price greater than

the amount charged for the property returned

Claim only the amount of the sale before tax. For example, if the returned merchandise had been sold for $15 plus sales

tax, you would claim only $15 as a deduction.

(Regulation 1655, Returns, Defects and Replacements.)

Line 5. Cash Discounts on Taxable Sales

If you gave a cash discount to a customer on a taxable sale, enter the amount of the discount here.

You can claim a deduction on this line only if you reported the full (undiscounted) selling price on line 1. Do not use this

line if you reported the discounted selling price on line 1 of this return or a previous return. In addition, you must ensure

that you do not collect from your customer more tax than the amount due on the discounted price. If you collect more

than the amount due on the discounted price, you cannot claim this deduction.

(Regulation 1671, Trading Stamps and Related Promotional Plans; Regulation 1700, Reimbursement for Sales Tax.)

Section C. Lines 1 thru 5: Partial Exemptions

Due to a change in the state tax rate you must report your transaction(s) prior to January 1, 2013 separately from your

transaction(s) that occurred on or after January 1, 2013. Enter your transaction(s) in the appropriate column for the

period in which the transaction(s) occurred.

This will ensure your credit is taken at the appropriate rate.

The following transactions are exempt from the state portion of the total sales and use tax rate. They remain subject to

2.00 percent of the total sales and use tax rate, representing local, city, and county taxes. They are also subject to any

applicable district taxes. If the partial exemption was taken prior to July 1, 2011, click here.

Exemption Certificate Requirements

Retailers who wish to claim a partial exemption must obtain from purchasers a timely, valid exemption certificate as

described in Regulation 1667, Exemption Certificates. The BOE has designed a specific certificate for this purpose,

entitled, “Certificate of Partial Exemption.” The certificate is available on our website at or call our

Taxpayer Information Section for a copy. Retailers must retain the completed certificate for a period of not less than four

years.

Line 1. Teleproduction Exemption

Complete this line to claim an exemption for sales or purchases made by qualified persons of tangible personal property

used primarily in:

• Teleproduction or other postproduction services for film or video that include editing, film and video transfers,

transcoding, dubbing, subtitling, credits, closed captioning, audio production, special effects (visual or sound),

graphics, animation, or

• With respect to property with a useful life of at least one year, to maintain, repair, measure, or test property used

primarily in teleproduction or other postproduction services

A qualified person is a business that is primarily engaged in providing the specialized motion picture or video postpro

duction services described above.

A qualified purchaser must provide the retailer with a Section 6378 Exemption Certificate; otherwise, the exemption will

not be allowed.

This exemption does not apply to the sale or use of any tangible personal property that is used primarily in administra

tion, general management, or marketing (used 50 percent or more of the time in one or more of those activities).

(Regulation 1532, Teleproduction or Other Postproduction Service Equipment.)

Line 2. Farm Equipment

For a description of exempt farm equipment and who is eligible to claim this exemption see publication 66, Agricultural

Industry and Regulation 1533.1, Farm Equipment and Machinery.

Instructions For Form Boe-401-A - State, Local, And District Sales And Use Tax Return Page 5

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