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How to Get a California Seller’s Permit

A document reading "seller's permit" in front of stacks of brown boxes

 

Q: I plan to do business in California, in addition to Wyoming. Should I get a permit in CA?

Thank you to one of our clients for sending that question! Most businesses that make sales in California will need to obtain a seller’s permit if they intend to sell (or lease) tangible personal property. After forming a business in California, you will likely need to apply for a permit with the Department of Tax and Fee Administration.

What is a seller’s permit?

A “seller’s permit” is registration needed to sell things in a specific location. In California, a seller’s permit is a document issued by the Department of Tax and Fee Administration that is required in order to register your business for sales and use taxes.

Is a seller’s permit the same as a business license?

Not exactly. California does not have a general state business license. Most California business licenses are either required at the state level for the legal sale of specific professional services (such as a contractor or doctor), or at the local level as imposed by cities or counties. A seller’s permit is a document that allows a business to collect sales tax.

Do I need a California seller’s permit?

If you engage in business in California, and sell or lease tangible property normally subject to sales tax at retail, you’ll need to get a seller’s permit (save for a small number of exceptions). As a California vendor, you need to collect sales tax and submit sales and use tax returns to the state.

How do I know if I’m doing business in California?

You are considered to be engaging in business in California if you have a physical location in the state, employ a sales representative or similar agent in California, or if you lease tangible property there.

What goods are subject to California sales tax?

Tangible personal property subject to sales tax includes furniture, clothing, toys, and many other goods. Sales tax is also required for any service or labor costs that result in the creation of tangible personal property, such as commissioning an artist to create a sculpture or make jewelry, even if the buyer supplies materials.

You can learn more about whether you need a California seller’s permit or not at the Department of Tax and Fee Administration’s seller’s permit page.

How do I get a seller’s permit?

You can apply for a California seller’s permit (along with other Special Tax and Fee programs) for your business by creating an account at the California Department of Tax and Fee Administration’s online services portal. You will need to provide your business information, along with projected monthly sales, projected monthly taxable sales, and the products you intend to sell.

Is there a fee to get a seller’s permit?

Registration for a seller’s permit is free in California, but you may be required to pay a security deposit for any unpaid taxes that could be owed if your business closes. The Department of Tax and Fee Administration determines that deposit at the time of application.

Do I need a permit for each place of business I own?

If your business has more than one location, you might have to get separate permits for each address. There are also case where a consolidated permit can be issued for multiple business outlets. The Department of Tax and Fee Administration will provide the permit based on the information you provide, so include all your locations to ensure you get the right kind of permit.

What happens if I don’t get a seller’s permit?

If you are found to have knowingly made sales without a permit, you will be required to pay the amount of tax that you would have if your business was registered, plus a 50% penalty on that amount, and an additional 10% penalty for failing to file a return by the due date—which can accrue additional interest itself.

Can I get a temporary permit instead?

If you’re selling at a location for less than 90 days, and have no permanent place of business, you can purchase a temporary seller’s permit instead of a registering for a full permit. Temporary permits come with their own restrictions:

  • they must be obtained at least 90 days before you begin selling at that location
  • you must provide a valid start and end date for the location
  • you can register for multiple locations during the same period of time, but you may not add a new one to an existing permit

You must file a return on or before the last day of the month your sales location closes (a seller with a location that closes in mid-March must file their return by the end of April, for example).

Learn more about How to Start a Business in California.

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