California Seller's Permit: Who Needs One and How to Get It
Who needs one, who doesn't, and how temporary, marketplace and out-of-state sellers fit in.
You need a California seller's permit if you are in the business of selling or leasing goods that are taxable at retail in California, including wholesale sales for resale. As a rule of thumb, 3 or more sales in 12 months means you need one. It is free from the California Department of Tax and Fee Administration (CDTFA). Services-only businesses, occasional sellers, and sellers whose every sale goes through a registered online marketplace generally don't need one.
Who needs a seller's permit
CDTFA's rule (Regulation 1699) is that every person engaged in the business of selling tangible goods whose retail sale is subject to sales tax must hold a permit for each place of business where sales are customarily made. That covers:
- Shops, restaurants and other storefronts.
- Online sellers based in California selling from their own website.
- Wholesalers and manufacturers selling for resale: Publication 109 says the requirement applies "regardless of whether the sales are at retail or for resale."
- Sellers at swap meets, flea markets, craft fairs and trade shows.
- Businesses that lease equipment or other goods.
- Businesses selling only to the federal government (Regulation 1699(b) still requires a permit).
One permit covers several activities on the same premises, and a warehouse that customers don't visit doesn't need its own permit. The permit has to be displayed at the location it was issued for (Revenue and Taxation Code 6067).
Who doesn't
- Occasional sellers. No more than 2 sales in 12 months, such as a garage sale, unless the number, scope and character of your sales mean you're really in business (Regulation 1595).
- Services only. The permit is for sales of tangible goods. If you also transfer parts or materials as part of the job, ask CDTFA.
- Exempt goods only. A business whose sales are all exempt, such as most food for home consumption, or only animal feed (Regulation 1699(c)), isn't required to hold one. Add soda, alcohol, hot prepared food or any non-food item and that changes.
- Interstate-only sellers. If every sale is shipped outside California and none are made here (Regulation 1699(b)).
- Marketplace-only sellers. See below.
Selling through online marketplaces
Since October 1, 2019, a registered marketplace facilitator is the retailer for the sales it facilitates (R&TC 6043), so it collects and pays the tax. A marketplace seller has to register only for retail sales made on its own behalf and not through a registered facilitator (R&TC 6045). If you sell on a large marketplace and on your own website or at events, you still need a permit for the second group of sales. Check that the platform is actually a registered facilitator. CDTFA notes that some online auction sites are not, and then the tax is yours.
Temporary seller's permits
If you will sell at one location for 90 days or less and have no permanent place of business, you need a temporary seller's permit for that location. Common examples are Christmas tree lots, fireworks stands, fairs and festivals. CDTFA's rules:
- It's free, and you can apply up to 90 days before you start.
- One temporary permit can list several locations, but only within the same 90-day period. You can't add a new location to an existing temporary permit.
- If you already hold a regular permit, you don't get a temporary one. You add a sub-permit for each temporary location instead.
Out-of-state sellers
A seller with no place of business, staff or inventory in California must register with CDTFA and collect California use tax once its California sales (counting related companies) are more than $500,000 in the current or prior calendar year (R&TC 6203, after AB 147). Below that, registration is voluntary, and California buyers owe the use tax themselves.
Other CDTFA accounts you might need
Some products need an extra CDTFA account on top of the seller's permit:
- Cigarette and Tobacco Products Retailer's License
- Covered Electronic Waste Recycling Fee (eWaste) account
- California Tire Fee account
- Lead-Acid Battery Fee account
- Cannabis Tax Permit
How to register
- Register online on CDTFA's Online Services page (Registrations tab). Have your business type, start date, locations and expected sales ready.
- Pay any security deposit CDTFA asks for.
- Display the permit and start collecting sales tax at your location's rate.
- File sales and use tax returns on the schedule CDTFA assigns, even for periods with no sales, until you close the account.
Don't register just to buy tax-free. A permit lets you give suppliers resale certificates for items you'll resell, but using a certificate for things you'll use yourself is against the law (CDTFA Publication 107). When you stop selling, tell CDTFA to close the permit. Until you do, you can be liable if someone else uses it.
Run your numbers
Answer a few questions in the Seller's Permit Checker. To find the sales tax rate to charge, use the Sales Tax District Rate Lookup. For your city's own license, see the Business License Finder.
Frequently Asked Questions
Is a California seller's permit free?
Yes. Registering with CDTFA costs nothing, for regular and temporary permits alike. CDTFA may ask some new sellers for a security deposit, and returns any unused part when the account is closed.
Do I need a seller's permit for a garage sale?
No, as long as you have no more than 2 sales in a 12-month period and aren't otherwise in the business of selling. More than 2 garage sales in 12 months means you need one.
Do I need a seller's permit if I only sell on Amazon or Etsy?
Generally not for those sales. A registered marketplace facilitator is treated as the retailer for sales it facilitates, and it pays the tax. Sales you make yourself, on your own site or in person, still need a permit.
Do wholesalers need a seller's permit?
Yes. CDTFA says the permit requirement applies whether your sales are at retail or for resale. The permit is what lets you take resale certificates from your customers and give them to your suppliers.
Is a seller's permit the same as a business license?
No. The seller's permit is a state registration with CDTFA for sales and use tax. Most cities and counties also require their own business license or business tax registration, which is separate.
This article is for general information only and is not tax advice. Sources: CDTFA Publications 107 and 109, Temporary Sellers and Permits & Licenses pages; Regulations 1595 and 1699; Revenue and Taxation Code 6043, 6045, 6066, 6067 and 6203.