Are You a Temporary Seller for Sales Tax in California?
- Apr 18, 2016 | Avalara
This post is by contributor Karan Johnson.
More people these days have a ‘side hustle’ to supplement their income. Your side business might be small-beans or short-lived, but selling goods or services even on a temporary basis could sweep you up into the world of sales tax obligations.
Do I Qualify?
You’re considered a temporary seller in California if you sell things in-person or online for less than 90 days. The types of sales include retail, ecommerce and resale. So, selling Christmas items at your local market or on Amazon for less than 90 days will put you into the temporary seller bracket. However, you’ll be classified as a retailer or seller if you make three or more sales of significant sums over a 12 month period.
If your sales will take place from several temporary fixed locations for less than 90 days, each sales location will need to be registered. For examples, if you have a Christmas tree empire that pops up in Sacramento, Needles, and L.A. from Thanksgiving to Christmas, you'll have to register all three locations. However, if you have a seller’s permit for a permanent business location, you only need to register for sub-permits for any additional temporary locations.
Hosting garage sales and selling at swap-meets and flea markets can shift you from temporary seller to seller status for tax purposes if you do it often enough. You’ll be added to the seller ‘zone’ if you have a third garage sale within a year. Check-out the guidance on the Board of Equalization’s (BOE) website in relation to selling at swap-meets and similar events.
As with any tax topics, there are exclusions. You will not be classified as a temporary seller -- or a seller, for that matter -- if someone else is responsible for paying taxes on your behalf, such as when an auctioneer sells your stuff for you or when you resell items that you’ve bought from a direct sales company, like Avon or Amway (such companies are responsible for paying sales tax for their agents).
I’m "Temporary." What Do I Do?
You’ll need to collect sales taxes on your taxable sales and file your returns when they're due once you’ve received your temporary seller’s permit.