How Many Sales Does It Take to Require a Seller’s Permit in California?
- Sep 2, 2015 | Gail Cole
Answer: 3 in a 12-month period
Any person or business that makes at least 3 sales of tangible personal property (TPP) or services in California State Board of Equalization (SBE) and collect and remit California sales tax on all taxable sales.
Here’s the kicker: It doesn’t matter how those sales are made. Selling through an online auction house like eBay or uBid? You’re required to register and collect sales tax if you make 3 or more sales during one 12-month period. Selling through Internet classifieds, such as Craigslist? Ditto.
As the BOE reminds in Publication 177, Internet Auction Sales and Purchases:
“There is no general tax exemption for sales made over the Internet. Thus, Internet sales of tangible personal property are generally taxable in California. Sales and use tax applies to Internet sales in the same way as sales made at retail stores or other outlets, through sales representatives over the telephone, or by mail order.”
Making sales in California without first obtaining a seller’s permit is a violation of California law and could result in fines and penalties. Unless you know you’re going to make no more than 2 sales during a 12-month period, you’d best register. This rule even applies to garage and yard sales: If you host them more than twice annually, you’re considered to be in business and must register and collect and remit tax. Temporary sellers (think Christmas trees and fireworks) may obtain a temporary seller’s permit. Additional information is available in Publication 107, Do You Need a California Seller’s Permit?
It should be noted that registration is not required for sellers whose sales are “made exclusively in interstate or foreign commerce” and who make no sales in California. However, “your business may meet the requirements of a ‘qualified purchaser’ and you may be required to register for a use tax account.” When in doubt, register.
Small businesses can file sales tax returns quickly easily with Avalara TrustFile. Learn more.