Whenever you lease or sell vehicles, merchandise, or other forms of tangible personal property in the state of California, you will usually be required to register with the California Department of Tax and Free Administration (CDTFA) agency. You will also need to pay sales tax on any sales that are taxable. When you register with the CDTFA agency, you will be issued a seller’s permit. Here is some information about the California seller’s permit and the reasons you may need one.
Why You Need a California Seller’s Permit?
Sometimes, people make the mistake of referring to the seller’s permit as the resale permit or the resale number. A seller’s permit refers to a state license that permits you to sell items at the retail or wholesale level and to issue resale certificates. Issuing a certificate for resale will allow you to purchase items that you will sell in your business without paying large amounts of tax to the suppliers.
In general, if you make at least three sales in 12 months, you need to have a seller’s permit. This is true even if your sales are made through eBay, uBid, and other Internet auction houses. You also need a seller’s permit if you make sales on websites that feature online classified advertisements like Craiglist.
When you sell used items or have a garage sale, you do not need to have a seller’s permit unless you have at least two garage sales in a period of 12 months. However, if you are in the business of selling goods, merchandise, items, and other tangible personal property, you do not need a seller’s permit.
It is a violation of the law if you sell goods, merchandise, or other goods in the state of California before getting a seller’s permit. If you violate this law, you could be subjected to fines and penalties. According to the law in California, you need a seller’s permit for warehouse locations when a sale is negotiated out of a state, the retailer has at least one sales office in the state, and the order is filled from the in-state inventory of goods at the warehouse. However, you do not need a seller’s permit if all your sales are in foreign commerce or interstate commerce. Just keep in mind that your sales need to be exclusively for out-of-state commerce to not need a seller’s permit. Even if you make one sale of in-state commerce, you will need a seller’s permit.
As you can see, there are many reasons why you could need a California seller’s permit. For more information about the California seller’s permit, we recommend checking out fastfilings.com!
