California State Sales Tax Online Registration

Any business that sells goods or taxable services within the state of California to customers located in California is required to collect sales tax from that buyer. This will include all online businesses. Any seller which conducts business and has a major presence within the state must collect sales tax in California must pay taxes to the state. Therefore, these sellers required to file for a Sales tax certificate. By not doing so the business may face sanctions or other types of penalties. Additionally, depending on the businesses location and tax jurisdiction, localities such as counties, cities, and other districts can also add additional sales and use taxes.

Do you need to get a Sales Tax certificate in California State?

You may need a Sales Tax Certificate if any of the following apply your business:

  • You have a physical office or place you conduct
  • You sell or ship products to a buyer in California
  • You have a distribution location such as a storage area or warehouse space
  • You have employees physically present in California ( including independent contractors, Sales persons, representatives, or agents )
  • Your business has a 3rd party affiliate located inside the state of California
  • Your business has a presence at trade shows within the state of California

What constitutes taxable services in California State?

The majority of service businesses are not taxable in California. The exceptions would be service businesses that sell products and sells them at retail to their customers. A good example of this would be a HVAC company that services and sells air conditioning units and their parts.

Why do I need a Sales Tax Certificate to purchase wholesale items for Resale in the State of California?

As a wholesale company conducting business in the state of California, you are required to have a sales tax certificate when purchasing items at wholesale prices, Therefore, suppliers must request a copy of your resale certificate before selling you items at wholesale prices.

Do you have to collect Sales Taxes from out of state buyers?

While you may not collect sales taxes from your out of state customers, you are still required to collect their information and report it to California State.

If you an online seller, do you need to collect sales tax on shipping and handling of merchandise?

Shipping and handling charges are generally not taxable if you separate it from the purchase price of the item being sold on the invoice. Also, the merchandise must be shipped to the consumer with a common carrier method not using company owned vehicles

Is there sales tax on drop shipments in the state of California?

A drop shipment is where a seller (most times out of state) sells a product which is then delivered to a consumer by a third party shipper. In most instances, drop shipments in California are exempt and therefor are not required to have sales tax added

Are there any exemptions to taxable items sold?

Certain specific medical devices, raw materials, newspapers and magazines, groceries, and custom downloadable software are tax exempt

Register for a California sales/use tax number

California state, county, city, & municipal tax rate table

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