How to get a seller’s permit in California

Gain the ability to sell in California with a crucial seller’s permit, applicable to many businesses. Secure your permit easily through the CDTFA, with no cost for application, enhancing your operational compliance.

By Douglas Wade, Attorney

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Table of Contents

1. Why do you need a seller’s permit in California?

2. Who requires a seller’s permit in California?

3. How to get a California seller’s permit

4. How much a California seller’s permit costs

Why do you need a seller’s permit in California?

With a seller’s permit from the state of California, your company can make sales and gather sales tax in the state. In California, seller’s permits are required for the majority of individuals and companies who engage in commerce by leasing or selling tangible property, but even with such broad regulations, there are a lot of specifics to know.

Who requires a seller’s permit in California?

The fundamental guidelines for determining if you require a seller’s permit in California and how to obtain one are provided on the official site of the California Department of Tax and Fee Administration (CDTFA). The two primary requirements are if the physical property you are selling or leasing would normally be charged sales tax if sold at retail and if you are doing business in the state.

In California, there are many different ways to be engaged in business, such as having a salesperson working in the state or having a physical location of business, like a satellite office or warehouse. The state of California views you as engaged in business even if you are merely renting space to carry out your operations. Retailers, wholesalers, and all other kinds of companies—from corporations to limited liability organizations (LLCs)—are subject to the same regulations regarding seller’s permits.

Ordinarily liable to sales tax if sold at retail, tangible property includes everyday products like furniture and clothing. Although sales tax is not applied to labor or services in California, the CDTFA advises that you contact its office for clarification if you have any doubts due to the complexity of the laws governing this.

If your business is solely seasonal and/or you only sell during specific times of the year (craft fairs, Christmas and holiday sales, etc.), you must apply for a short-term seller’s permit to accommodate those times. If you sell physical property for less than ninety days from a single location, the state views your company as temporary.

How to get a California seller’s permit

In California, you can apply in person at a CDTFA office or online by filling out an application for a seller’s permit.

When you apply, you must provide the following information in your application: your Social Security number, another personal ID number (driver’s license, passport, etc.), the date of incorporation of your business, bank account information, the company’s Employer Identification Number (EIN), supplier details, and expected monthly sales.

How much a California seller’s permit costs

In California, there is no cost associated with acquiring a seller’s permit. But, if you have back taxes to pay, the state could ask for a security deposit to take care of any unpaid taxes in the event that the company shuts down. This sum is set by the state at the time of application.

You should prominently show your seller’s permit in your business location as soon as your application is accepted. In case you need to consult it, you might also want to store a copy of your seller’s permission in a secure place. Although the CDTFA may provide you with a seller’s permit that applies to several sites, you may require different permits if you do business at many locations.

Now that you have your seller’s permit for California, you can start collecting sales tax from transactions. You must then record and pay this sales tax to the state.

Have a quick question? We answered nearly 2000 FAQs.

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