Starting a business in California is an exciting venture, but it’s crucial to understand the legal requirements that come with it. A common area of confusion for many new business owners is understanding the need for a seller’s permit in California, also known as a sales tax permit. This allows you to collect sales tax on taxable products and services from customers in California and remit it to the state.
This blog will guide you through each step of applying for a sales tax permit, with clear instructions to help you and your business begin collecting sales tax effortlessly.
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Who Needs a Seller’s Permit in California?
A business must register for a sales tax permit in California if:
How to Register for a Seller’s Permit in California?
When applying for a Seller’s Permit in California, you can use the online application process on the California Department of Tax and Fee Administration (CDTFA) website to complete your sales tax registration.
1. Where can you Apply for a Seller’s Permit in California?
The first step to register for a sales tax permit online is to go to the California Department of Tax and Fee Administration website and click the title “Register for a Permit, License, or Account.” Next, you’ll be directed to a selection of registration choices. Here, click on the option labeled “Register a New Business Activity.“
Complete answering the questions and make sure to confirm you’re applying for a seller’s permit.
2. What Information do you Need to Get a Seller’s Permit in California?
To successfully acquire a seller’s permit in California, it’s important to prepare and provide specific information and documents. The following is a list of the necessary information and documents required to register a sales tax permit in California:
- Business Identification Information: Legal business name, physical address, mailing address
- Business Entity Structure (i.e., sole proprietorship, partnership, Subchapter S Corp., corporation, LLC, etc.)
- Federal Employer Identification Number (EIN or FEIN)
- Name, Address, Driver’s License, and SSN of owners, partners, or officers
- Business Activity Details: Date & State of Incorporation, start date with the state of California (nexus start date), Estimated Monthly Sales in California
- Names and locations of banks where you have an account
- Names and addresses of suppliers
- Name and address of bookkeeper or accountant
- Name and address of personal references
- If you have purchased an existing business, you must also provide the previous permit information
- NAICS Code
3. How Much are the Fees for Applying for and Renewing a Seller’s Permit in California?
Registering for a sales tax permit in California is free, but you might need to pay a security deposit for sales tax to cover any unpaid taxes that may be owed at a later date. The amount of the security will be determined at the time you apply.
A California sales tax permit does not need to be renewed and will remain valid for as long as the business exists without any changes in ownership or structure unless you sell cigarettes and tobacco products. If you do, you’ll need to renew your permit on a regular basis.
4. What are Other Ways to Register for a Seller’s Permit in California?
- Use TaxHero. Registering for a seller’s permit, mainly when it involves multiple permits, can be a tedious and time-consuming task requiring much effort. Let the experts at TaxHero save you from this hassle, and let us handle the registration process in all states where you have nexus as part of our all-inclusive sales tax service.
- Register in person: If you prefer, you can also register in person by visiting any of the CDTFA field offices.
What’s Next?
After your online submission, the CDTFA might request for additional information or documents (i.e. Articles of Incorporation for your business). If this is the case, they will send you an email for this additional request.
The processing time for your sales tax application can range anywhere from one business day to as long as one month.
As soon as your application is approved, you will receive a copy of your seller’s permit and security code for your online tax account to your mailing or physical address that was provided during registration.
Using the security code, log in to your CDTFA online account to add your sales tax account.
You can contact OSReg@cdtfa.ca.gov if you have any questions or issues with your registration.
Remember that if your business has a physical location in California, the Seller’s Permit must be visibly displayed at all times at the place for which the certificate is issued.
If you ever encounter any difficulties, have any questions, or prefer TaxHero to manage these tasks on your behalf, don’t hesitate to reach out! Contact us today.
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