State of California Sellers Permit is one of the many requirements when you are either starting or purchasing an existing business in California.
When you start a business, you need to meet City, County and State Requirements such as City License, Fire Department and Health Permit.
In this articles we will be discussing all aspects of California’s Sellers Permit
What is California Sellers Permit?
In California, a sellers permit is required for any individual or business that sells merchandise, goods, or property.
This permit allows businesses to collect and remit sales taxes on the merchandise they sell.
The California Department of Tax and Fee Administration (CDTFA) is responsible for issuing sellers permits and administering sales tax in the state
There are a number of benefits to having a seller’s permit, including the ability to buy merchandise wholesale and the ability to file quarterly tax returns. In addition, having a seller’s permit can help to streamline the sales process and make it easier to keep track of inventory.
Obtaining a sellers permit is an important step in starting a business in California, and it helps to ensure that businesses are complying with the state’s tax laws.
Who Issues California Sellers Permit?
California Department of Tax and Fee Administration also known as CDTFA is responsible for issuing Sales Tax Permit and making sure there is statewide compliance related to Sales & Use tax Law.
CDTFA not only issues the Sales Tax Permit, but also oversees audits and compliance that comes with having a Sellers Permit.
How to Apply California Sellers Permit Online?
You can apply for California Sellers Permit online by clicking here
You can also use this link for Use Tax Filing as well.
Who Needs a Sellers Permit
You must obtain a State of California Seller’s Permit if you:
- Are engaged in business in California
- Are looking to sell or lease Tangible property in California that is taxed in California such as furniture, clothing
Important Note: This requirement applies to Retailers and Wholesalers. Furthermore, This requirement applies to you even if you are a corporation c or s, LLC, Partnership or Sole Proprietorship.
Do You Need More than One Sellers Permit?
If you have more than one place of business in California(Different Locations), you will most likely need a separate permit for each location. Its required that each location displays their own sellers permit copy.
In some instances it is possible to obtain a consolidated permit for multiple business outlets.
When you applying for the sellers permit don’t forget to provide information for all business locations so that the CDTFA will issue the correct type of permit for each location of business you own.
For example if you have 3 separate restaurants and they are under three separate corporations, each will need a separate sellers permit.
How Much Does it cost to get a Seller’s Permit?
There is No Cost to apply for Sellers Permit. You may be required to put a Security deposit with CDTFA to offset any future taxes.
There are other related License or Permits such as Cigarette License/Permit that has a fee of $100. This fee may change in the future so Check with CDTFA.
California Online Seller’s Permit Verification Tool
If you are unsure about a Seller’s Sales Tax Permit, You can verify California Sales Tax and Related Licenses by Clicking Here.
Here is another helpful link regarding California Online Sellers Permit Verification Tool.
If you don’t find the vendor online, you can always call CDTFA
Do Seller Permit Expire
Sellers Permit Do not expire until unless you sell or close your business. Several other related licenses such as Cigarette License may needed to be renewed each year.
If you have Temporary Sellers Permit, then they are typically valid for 90 Days and you do need to renew them.
Temporary Seller’s Permit California
If you are a small business owner who will be selling taxable items at a temporary location for less than 90 days, you are considered a temporary seller, and are required by CDTFA to hold a temporary seller’s permit.
This permit allows you to sell taxable goods and services on a temporary basis. Typically, a Temporary Seller’s Permit is valid for up to 90 days.
To obtain a permit, you’ll need to submit an application to the California Department of Tax and Fee Administration. Once your application is approved, you’ll be issued a permit number that must be displayed at your place of business.
When your permit expires, you’ll need to reapply if you wish to continue selling taxable goods and services in California.
Obtaining a Temporary Seller’s Permit is relatively simple. You can do it online, by mail, or in person at your local California Department of Tax and Fee Administration office. The process takes just a few minutes, and you’ll need to provide some basic information about your business, such as your business name and address. Once you have your permit, you can start collecting sales tax from your customers.
You can Apply for Temporary Seller’s Permit in California by Clicking Here
What do you need to get(apply) a Sellers Permit?
Gather the following information when you are ready to apply for California Sellers Permit:
- Business Name
- Business Address
- Business Tax ID Number
- Business Phone and Email
- Projected Monthly Sales
- Projected monthly Taxable Sales
- Products you are planning on selling
- Vendor Names, Address and Phone Number
- Merchant Credit Card Processor Contact Info and Account Number
- Accountant(if you have one) Name, Address, Phone Number
- If Applicable Cigarette License/Permit, ABC License and Permit Number
- Bank Name, Type of Account, Routing and Account Number if you want Auto Payment of your Sales Tax from your Bank Account.
Can Sale Taxes Returns be subject to California State Audit?
Yes. CDTFA can audit you anytime to make sure you are collecting and paying correct Sales Tax Amounts Your sales tax
CDTFA auditor may determine that you owe tax as a result of California State Audit. You may even end up getting a refund if you over paid due to miscalculation or mistake.
California Sales Tax Rate (City & County Rates Included)
California’s sales tax rate is 7.25%(You need to add city and country Rates on top of this Typically another 2 to 3 percent).
California has one of the highest sales tax rates in the country. The state’s base sales tax rate of 7.25% is applicable to all retail sales of tangible personal property except for certain exempt items like groceries and prescription drugs.
There are also additional local taxes that may apply; in some areas, the total sales tax rate is as high as 10%.
California’s high sales tax rate can be a burden for small businesses, particularly those that rely on out-of-state customers who may be less likely to make purchases if they have to pay a higher tax rate.
As a result, many businesses choose to remain below the threshold for California’s sales tax or to offer discounts or other incentives to offset the cost of the tax.
You can check Current California Sales Tax Rate by Clicking Here
California Sales Tax Forms(CDTFA Forms)
Click Here to see all available forms for California Sales Taxes on CDTFA Website
How to File California Sales Tax Return
In order to file a California Sales Tax Return, you need to have your Total Sales, Taxable Sale ,Non Taxable Sales & any Prepayments already paid.
These information will be needed to accurately calculate the Sales Tax Amount that is due
If you new to filing sales taxes, we suggest you See This Helpful Video by CDTFA that Shows How to file Sales Tax Return.
There are other helpful videos available as well on the website.
California Sales Tax(CDTFA): Industry Guides and Tax & Fee Guides
CDTFA makes several helpful Industry guides available. See this link to check them out.
These Industry Specific Tax and Fee Guides are ultimate guides for small business owners and operators looking for relevant information on key tax and fee issues.
If you want to see what guides are available then click here