How to Apply for a California Seller’s Permit?

How to Apply for a California Seller’s Permit?

Setting a new business in California sounds all exciting but do you have a  California seller’s permit? A seller’s permit is a business license that allows you to collect taxes on taxable goods and services. The taxes then are required to be reported and paid to the state’s concerned taxing authority. 

Also, known as use and tax permit, a seller’s permit offers you many advantages including protection from fines and penalties. Now, the question is how to apply for a seller’s permit? Read on to know. 

Who Needs a Seller’s Permit? 

As per the guidelines issued by the California Department of Tax and Fee Administration, a party must obtain a seller’s permit if: 

  • Engaged in business in California and 
  • Intend to sell or lease tangible property that would be subject to sales tax when sold at retail. 

Individuals, corporations, LLCs, partnerships, wholesalers, and retailers must apply for a seller’s permit. Even if your business operations run for a temporary period of time like christmas tree sales, etc, you still have to get a permit. Such permits are usually issued to operations which last no longer than 90 days at a location. 

Well, some states do not have the system of sales tax: 

  • Delaware
  • Alaska
  • Oregon
  • Montana
  • New Hampshire 

Also Read: Low Conversion Rate – Start Doing These Sales Techniques

How to Apply for a Seller’s Permit in California?

How to Apply for a Seller’s Permit in California? 

Well, the process of getting a seller’s permit is a bit different in every state. Speaking of California, below are the steps you need to follow in order to get a seller’s permit: 

  • Register online for a seller’s permit with the California Department of Tax and Fee Administration (CFDTA). 
  • File your business formation documents with the CFDTA. 
  • Documents and information you need while applying for a California seller’s permit: 
  1. The company’s EIN or federal taxpayer identification number ( if applicable) 
  2. Social security number of each owner, or corporate officer (if applicable) 
  3. A photocopy of the driver’s license 

  – Partnership:  a photocopy of each partner’s driver license

  –  Limited Liability Company:  a photocopy of driver’s license of all the members

   – Corporation: social security number of all the corporate officers. 

  1. Details of every bank where the company has registered an account
  2. Details of each of the company’s suppliers
  3. Details of the person who will be accountable for managing company’s tax records. 
  4. Two personal references 
  5. Details of your products and services 
  6. Expected monthly sales 

Note : If you have taken an existing business, you are also required to provide the information of a previous sales permit. 

Upon successful registration, the department will issue your seller’s permit within 14 days. If applied in person, the permit can be issued the same day. 

Cost of a California Seller’s Permit: 

There is no fee for getting a seller’s permit in California. You may be required to pay a security deposit if you owe back taxes to the state. The amount of security deposit is decided at the time when you apply.

 What’s Next After Getting Your Seller’s Permit? 

Once you get your California seller’s permit, your business must follow the followings:

  1. Keep proper records of its sales, purchases and return deductions for a time period of four years. 
  2. File for a sales tax return
  3. Pay sales tax on all retail sales recorded in California
  4. Any change in the business is required to be reported to the State Board of Equalization. 

Well, this is it. Once you get your California seller’s permit, you can start collecting sales tax on your products and services. Make sure you ensure proper payment of sales tax to the state’s tax department to avoid any fines and penalties. 

Jamie Lowe

Jamie has been around in the financial sector for a long time. In her free time, however, she likes to spend time outdoors. This fitness freak believes in two things: a strong core and a great DIY. She hopes to make it easier for people everywhere to beautify their houses at a nominal cost

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