When your California business obtains goods from other supplies and then sells them to retailers, you will need to obtain a wholesale license, called a seller's permit in the state, if sales tax applies to those goods. Depending on how much money your business receives and where in the state it's located, you may also need a use tax account and obtain business licenses at the city or county level. You can conveniently complete the steps to obtain the necessary permits, accounts and licenses online, although California also offers in-person registration if you'd prefer personalized guidance.
Obtain a Seller's Permit
If you're dealing in wholesale goods subject to sales tax at the retail level, you need a California seller's permit. This rule holds for corporations, partnerships, limited liability companies and sole proprietors. There's no fee charged for a seller's permit, but the Board of Equalization may require a deposit to be applied to due and payable taxes. You must have a permit for each place of business, unless the agency approves you for a consolidated permit_,_ which is a seller's permit that covers operations at multiple locations within the state.
Obtain a California Reseller Permit
The state government recommends that you also obtain forms for a California resale certificate if your business buys products from other suppliers exclusively for resale. While the government does not supply such a document, you can obtain forms for this certificate at an office supply store and fill in the required information about the purchaser, your seller's permit, the purchase type, statement of intent of resale, date and signature.
Get a Use Tax Account
California requires a use tax if your business collects a minimum of $100,000 in gross receipts from all operations, you're not required to hold a seller's permit, you're not registered for direct payment of use taxes to the state, and you're not otherwise registered with the BOE for payment of use tax.
This tax applies if you're not subject to sales tax; in effect, the state will charge you use tax on those items you deal in that have avoided sales tax charges. Use tax may arise, for example, because an out-of-state seller is not required by his home state to charge you sales tax, or you're dealing in goods purchased online for which no California sales tax was charged.
Seek a Business License
The city or county where you establish operations may require a business license, which is entirely separate from state-issued seller and use-tax permits. Additionally, you may need to register the business with the Franchise Tax Board, which is the California state income tax agency. To thread your way through this licensing maze, a good place to start is the Governor's Office of Business and Economic Development site, also known as GO-Biz, and the
Consider Online Registration
The state Board of Equalization provides online registration for a use tax account or seller's permit. The business registration system requires that you identify your business by one or more criteria: "Employing 10 or more people," or "Selling items or goods in California." After you've selected the appropriate descriptions, the system then directs you to additional screens to get you to the appropriate applications for licenses and permits. Selling certain items, such as alcohol, tobacco products, tires, vehicles, construction equipment, electronics, fuel and lumber, requires additional licenses.
Consider In-Person Registration
If you prefer face-to-face registration, you may visit a Board of Equalization field office. These offices are in major cities throughout the state. To open an account and to obtain the required certificates, you must provide your name, Social Security number, state ID number, date of incorporation if applicable, the name of your bank, your business name, business address and an email address. The BOE also wants information on your suppliers, your average monthly sales numbers and personal references.
Founder/president of the innovative reference publisher The Archive LLC, Tom Streissguth has been a self-employed business owner, independent bookseller and freelance author in the school/library market. Holding a bachelor's degree from Yale, Streissguth has published more than 100 works of history, biography, current affairs and geography for young readers.