Seller’s Permit and Resale Certificate in California
A seller’s permit provides a business authority to make sales inside California.
Understanding Seller’s Permit
Any business engaged in selling or leasing tangible personal property ordinarily subject to sales tax must have a Seller’s Permit. The definition of “engaged in business” includes having an office, sales room, warehouse or property you receive rental payments for in the state. Even temporary sales need a seller’s permit.
The first step in getting a resale certificate is applying for a California Seller’s Permit. This provides a business a unique sales tax ID number. With that, you can complete the tax exemption certificate by providing your Seller’s Permit Number.
Resale Certificate
A resale certificate certifies you can buy wholesale to resell. When obtaining a seller’s permit, you also get the resale certificate.
As a seller, you may accept resale certificates from others purchasing items for resale. A resale certificate exempts the holder from paying sales tax on items to resell or use as parts in products/services they sell.
A seller’s permit allows selling items; a resale certificate allows buying in bulk without paying sales tax to the state.
Obtaining a Seller’s Permit
How to get a California seller’s permit? Apply through the California Department of Tax and Fee Administration (CDTFA). The website outlines eligibility based on being "engaged in business" in California or selling tangible goods subject to sales tax.
California seller’s permits allow businesses to charge, collect, and remit sales tax on taxable goods sold, with exceptions for exempt items like food. Fees vary based on business type and size, and additional local permits may be required depending on the jurisdiction.
Car dealers pay a $5 fee. The nonrefundable fee must be paid when applying.
The permit allows collecting state sales tax. Sales tax rates depend on the jurisdiction of sale.
The CDTFA guide "Seller’s Permit Application for New Businesses" outlines the process. Returns are filed quarterly. Consulting CDTFA experts also helps navigate requirements smoothly.