Issuing a resale certificate to avoid paying tax on items you will use rather than sell is against the law and may result in fines and penalties. ![]() Please note: You should not obtain a seller's permit just to take advantage of the opportunity to issue resale certificates to your suppliers. Our classes, publications, and online seminars can help you learn to meet your obligations and help ensure that you don't pay more or less tax than you owe. As a registered seller, you will need to take the time to learn how to properly apply the sales and use tax law in your business operations. You also must keep adequate records that document your sales and purchases. At the time you make the sale, you may collect from your customer an amount equal to the tax you will owe. You must report and pay sales tax on each taxable sale. When you hold a seller's permit, you must file sales and use tax returns and pay any sales or use tax due on your sales and purchases. However, your business may be required to register for a use tax account as discussed in the Required Registration to Report Use Tax section. ![]() You are not required to hold a seller's permit if all your sales are made exclusively in interstate or foreign commerce, and you make no sales in this state. California law requires a seller's permit be held for warehouse locations when: the retailer has one or more sales offices in this state, the sale is negotiated out of state, and the order is filled from the retailer's in-state stock of goods at the warehouse. Making sales of merchandise, goods, or other items in California without first getting a seller's permit violates the law and subjects you to fines and penalties. Please see Regulation 1595, Occasional Sales – Sale of A Business – Business Reorganization. When you have a garage sale and sell used items, you are generally not required to hold a seller's permit unless you have more than two garage sales in a 12-month period or are required to hold a seller's permit for being engaged in the business of selling merchandise, goods, or items (tangible personal property). For additional information, please see publication 109, Internet Sales, or call our Customer Service Center at 1-80 (CRS:711). This applies even if your sales are made through Internet auction houses or websites that offer online classified advertisements (online advertisers). Generally, if you make three or more sales in a 12-month period, you are required to hold a seller's permit. ![]() Issuing a resale certificate allows you to buy items you will sell in your business operations without paying amounts for tax to your suppliers. A seller's permit is a state license that allows you to sell items at the wholesale or retail level and to issue resale certificates to suppliers. Sometimes people incorrectly refer to a seller's permit as a resale number or resale permit. When you register, we will issue you a seller's permit. ![]() When you sell or lease merchandise, vehicles, or other tangible personal property in California, even temporarily, you are generally required to register with our agency, the California Department of Tax and Fee Administration (CDTFA), and to pay sales tax on your taxable sales. Do You Need a California Seller's Permit?
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