By Mark Sheffield, CPA, Principal
ASL Emerging Business Group
Yes, if you engage in business in California and sell tangible personal property that is typically subject to sales tax if sold at retail. If your business is just selling temporarily, such as a rummage or liquidation sale, you should apply for a temporary seller’s permit.
The state seller’s permit allows you to collect sales taxes from customers to cover any sales tax that you’ll owe to the state. You can obtain a no-fees state seller’s permit online at: https://efile.boe.ca.gov/ereg/index.boe.
If a business is not required to have a seller’s permit it may be required to establish a use tax account. If you have received more than $100,000 in revenue from business operations in any calendar year you are required to file an annual use tax return so you must register for a use tax account. What is use tax? If your California business purchases tangible merchandise for use in California from an out-of-state vendor (e.g., the internet) who does not collect California sales tax on the purchase, the purchaser is liable for use tax. Register for a use tax account at: https://efile.boe.ca.gov/ereg/index.boe and click “Register a business activity with BOE.”