Setting up a business in California involves careful consideration of several intricate legal aspects. It’s an important part of becoming a business owner that ensures that you comply with the state laws. One such important legal aspect is taxes.
Whether you are an LLC, a corporation, or any other business entity dealing with tangible goods, you are subject to California sales and use taxes. You are responsible to collect the due taxes on every taxable sale and remit it to the concerned authority, in this case, the California Department of Tax and Fee Administration or the CDTFA.
And in order to be able to collect and pay taxes, every business must apply for a CA Seller’s Permit.
But, how do you get through with the application?
This guide will help you understand the details of getting a California Sellers Permit.
How to Apply for a California Sellers Permit?
You can apply for a California Seller’s Permit online on the official website of the department or by visiting the CDTFA office near you. There are several locations all across California and even out of state. You can find one near you here.
Here’s a step by step process you can follow to apply for a Sellers Permit California online:
- Visit the official website of CDTFA.
- Answer all the details in the questionnaire that follows. Start by selecting ‘seller’s permit’ and move on to the next questions. Enter your business information such as your business activity, goods, entity type, etc.
- Enter your SSN number (FEIN and SEIN are optional). Select your identification type (Driver’s License, State Identification Card Number, Employment Authorization Card, etc.)
- Select the account duration of your seller’s permit (90 days or permanent).
- Fill in the details of your business including Merchant Card Processor Name and Account, Internet sales (if any), NAICS Code, etc.
- Specify the business location and the DBA or Doing Business As (you need to file for a DBA if you don’t have one).
- Provide details for your Sales and Use Tax account such as your monthly sales, taxable sales, products sold (the department only requires a close estimate).
- Enter sales/use address details and supplier information (at least1).
- Select your reporting basis (monthly, quarterly or annual).
- Enter your information (name, phone, email, etc.)
- Finally, check the Declaration of Intent and submit your application.
Once you get through each of these steps, you need to sign up and create an account on the CDTFA website. It will help you manage your account easily. Use the security code sent to you by mail to complete the account creation. If you haven’t received your security code, you can apply for one and complete the process once you receive it.
If you are not well versed with legal jargon and all the requirements of legal permits, it’s easy to get lost in the process without professional help. With EZ Doc filing, you can get your California Sellers Permit without worrying about visiting different offices or wondering what each legal term stands for. You just need to fill out an application form and the team will handle the rest.
According to the CDTFA,
You must obtain a seller’s permit if you are ‘engaged in business’ which includes ‘having an office, sales room’, ‘a sales representative in the state’ or ‘receive rental payments’ on tangible personal properties.
Do You Need to Apply for a California Seller’s Permit?
Not all businesses need to apply for a sales permit in California. There are certain criteria that help owners determine if they need to get a seller’s permit and begin collecting sales tax.
How to Check Your Eligibility
Every state has different eligibility criteria for sales permits. The following are applicable in the state of California:
Go Through the State Laws
California collects sales and uses a tax on certain products, items, or services only. If your business is related to either of these services, you are subject to taxes and also required to apply for a sales permit.
Some of the tangible items subject to sales tax in California can be broadly defined as follows:
- Certain products are meant for human consumption.
- Services or goods sold to the U.S. Government.
- Prescription medicine or medical devices.
- Items or goods paid for using food stamps.
NOTE: The CDTFA allows certain exemptions and exclusions. You can check the entire list here.
Do You Fall Under the Sales Tax Nexus?
A tax nexus is a threshold that decides whether a business is liable to collect sales tax in California or not. The California law describes two types of tax nexus: Physical and Economic.
California Tax Nexus
|Other criteria of nexus that also apply to out-of-state businesses||
NOTE: California sales and use tax nexus applies to all online businesses as well.
What Kind of Permit do You Need?
A seller’s permit in California is of two types: Permanent and Temporary. In most states, businesses are not required to apply for a seller’s permit if they are earning through a temporary business such as farmer’s markets, garage sales, etc. However, the same does not apply within California.
Regular/Permanent Seller’s Permit
If you are an established business entity with regular sales, you will need to apply for a permanent seller’s permit. In this case, the license does not have an expiration date and allows you to collect and remit taxes to the CDTFA for as long as you are in business.
Temporary Sellers Permit
A temporary seller’s permit is valid for a period of 90 days only. You can apply for one if you are a temporary seller.
Who can use Temporary Sellers Permit?
If you are selling an item within California for a period that’s no more than 90 days, you must apply for a temporary sales permit. The most common types of temporary or seasonal vendors are :
- Firework stands, Christmas trees
- Garage sales
- Trade shows
- Flea markets
- Online auctions
Click here for more detail.
You must remember to register every location you will be working from temporarily during the 90-day period when applying for a temporary permit.
Try EZ Doc filing for Easy and Fast Filing
Seller’s permits can be a hassle for someone who has no idea where to begin. There are all sorts of different documents, identification numbers, and verifications involved which will take an entire week or two if you begin the process yourself.
So, skip the hassle.
EZDocfiling.com is meant to ease your worries and do the work for you. Fill in the application form here, and wait for your seller’s permit to arrive. It’s that easy. You don’t have to visit the CDTFA office, stress about missing important details, or worry about rejected applications. File within deadlines and avoid any fines with the professional help of EZDocfiling.