Taxes / Seller's permits by state / California
Do I need a seller's permit to sell on eBay or Poshmark in California?
No, if every sale goes through a registered marketplace facilitator: CDTFA says that since October 1, 2019 a marketplace seller is not required to register for a seller's permit if all of its retail sales are facilitated by a marketplace facilitator registered as a retailer with CDTFA. Any direct sale to California customers (your own website, Facebook, a craft fair or swap meet) counts as being actively engaged in selling, which requires a seller's permit; CDTFA charges no fee for the permit, though it may ask for a security deposit.
The permit is issued by the California Department of Tax and Fee Administration (CDTFA).
General information, not tax or legal advice. Check with a tax professional about your own situation.
Checked against the official pages listed below on .
California in short
- Sell only on marketplaces that collect the tax:
- No: the state says registration is not required
- Also sell direct (own site, Facebook, flea market):
- Yes: the state says to register; no fee
- Resale certificate:
- General Resale Certificate (CDTFA-230)
- Garage and occasional sales:
- Exempt: no more than two sales (each garage sale counts as one) in a 12-month period
- Where to register:
- CDTFA online services: Register a New Business Activity
If you sell only on eBay, Poshmark and other marketplaces
A marketplace seller whose merchandise is sold at retail only through a marketplace facilitator registered with CDTFA is not required to register for a seller's permit or a Certificate of Registration – Use Tax. CDTFA says to get and keep documentation that the facilitator is registered and responsible for the tax, and the facilitator's permit or account number.
The rule: Rev. & Tax. Code §§ 6040-6049.5 (Marketplace Facilitator Act); Regulation 1684.5.
"In general, marketplace sellers whose tangible merchandise is sold at retail exclusively through a marketplace owned, operated or controlled by a marketplace facilitator are not required to register with CDTFA"
"Your online sales of merchandise are generally taxable in California even when you sell through online auction houses such as eBay."
"You will be required to hold a seller's permit and report the tax if the online auction house is not considered a marketplace facilitator."
California sales tax applies to retail sales of tangible merchandise in the state. Since October 1, 2019, a marketplace facilitator is treated as the seller and retailer for each sale made through its marketplace.
Sources: Tax Guide for Marketplace Facilitator Act; Temporary Sellers; Publication 107, Do You Need a California Seller's Permit?
If you also sell direct: your own site, Facebook, flea markets, consignment
A person actively engaged in selling tangible merchandise in California, including direct sales to California customers that are not facilitated through a marketplace, is required to register for a seller's permit, one for each place of business where it customarily negotiates sales. Selling without a permit violates the law and subjects you to fines and penalties.
- Fee:
- No fee for a seller's permit; CDTFA may ask for a security deposit depending on the type of business and expected taxable sales.
"Actively engaged in selling tangible personal property (tangible merchandise) in this state includes direct sales to California customers that are not facilitated through a marketplace."
"You are required to have a permit if you are selling, even temporarily, new or handcrafted items or used items you purchased for the purpose of reselling to others."
"There is no charge for a seller's permit. However, depending on your type of business and expected taxable sales, we may ask you for a security deposit."
Sources: Tax Guide for Marketplace Facilitator Act; Publication 107, Do You Need a California Seller's Permit?; Obtaining a Seller's Permit; Publication 107, Applying for a Seller's Permit; Temporary Sellers.
Resale certificate: buying inventory without paying sales tax
- The form:
- General Resale Certificate (CDTFA-230)
- Do you need your own permit to give one?
- Not in every case: see the state's rule below
A purchaser engaged in the business of selling gives a resale certificate to a supplier when buying items it will resell in the regular course of business, such as inventory lots. CDTFA-230 is the general form, but a resale certificate may be in any form if it has the six essential elements, one of which is the purchaser's seller's permit number or an explanation of why the purchaser is not required to hold one. An unregistered marketplace seller explains that all its sales are facilitated by a registered marketplace facilitator and also gives the supplier the facilitator's permit or account number.
Thrift stores, estate sales and yard sales
The state pages we checked don't say anything specific about using a resale certificate at a thrift store, estate sale or yard sale. A certificate is given to a seller who would otherwise charge you tax, so whether a particular store takes one is between you and that seller; ask before you buy.
Misusing a certificate
CDTFA-230 states that knowingly using a resale certificate to avoid tax on items you won't resell can be a misdemeanor, and a person misusing one for personal gain or to evade tax is liable for the tax plus a penalty of 10 percent of the tax or $500, whichever is more, for each purchase.
"NOTE – unregistered marketplace sellers should explain that a permit is not required because all their sales are facilitated by a registered marketplace facilitator"
Sources: Tax Guide for Marketplace Facilitator Act; Publication 103, Sales for Resale; CDTFA-230, General Resale Certificate; Publication 107, Do You Need a California Seller's Permit?
Garage sales, yard sales and other occasional sales
Exempt: no more than two sales (each garage sale counts as one) in a 12-month period. An occasional seller is generally not required to hold a seller's permit. CDTFA says one or two garage sales of used goods accumulated for your own use within 12 months usually make you an occasional seller, but a third garage sale in that period makes you a retailer who must hold a permit. Regulation 1595 puts the general minimum that requires a permit at three sales within any 12-month period.
The rule: Cal. Code Regs., tit. 18, § 1595 (Regulation 1595).
"However, if a person holds a third garage sale within a 12-month period, they are considered to be a retailer and are required to hold a seller's permit."
Sources: Publication 107, Do You Need a California Seller's Permit?; Tax Guide for Home-Based Businesses: Industry Topics; Regulation 1595, Occasional Sales—Sale of a Business—Business Reorganization.
Worked examples
Marketplace-only seller buying a pallet
You sell only on platforms registered with CDTFA as marketplace facilitators and hold no permit. When you buy a $400 liquidation pallet to resell there, you can give the supplier a resale certificate that explains you need no permit because all your sales are facilitated by a registered marketplace facilitator, plus that facilitator's permit or account number. A supplier that takes a valid certificate in good faith doesn't owe the tax.
Adding swap meet sales
CDTFA says sellers at swap meets and flea markets that make retail sales generally need a seller's permit; selling at one location for less than 90 days calls for a temporary seller's permit, but three or more swap meets, flea markets or special events in 12 months call for an ongoing permit. The permit itself costs nothing.
Garage sales in one year
Two garage sales of your own used things in 12 months: usually an occasional seller, no permit. A third garage sale within that 12-month period: CDTFA treats you as a retailer that must hold a seller's permit.
Edge cases and details
- The marketplace exemption depends on the facilitator being registered (or required to be registered) with CDTFA; if your sales go through a marketplace that isn't, you are still the retailer for them.
- Selling at a swap meet, flea market or special event requires giving the operator specific information; CDTFA's form CDTFA-410-D can be used for it.
- CDTFA warns not to get a seller's permit just to issue resale certificates for things you will use rather than sell; doing so is against the law.
- A seller's permit is needed for each place of business where you customarily negotiate sales, not for a storage-only location customers don't visit.
- If you already hold a seller's permit for a permanent place of business and also sell at a temporary location (a flea market or event for less than 90 days), CDTFA says you register a sub-permit for each temporary location instead of a separate temporary seller's permit.
- To apply, CDTFA asks for information about the business, including bank account details and estimated income, and about you, including your driver license and Social Security numbers (or substitute documents explained on the application); it says it may be able to issue the permit the same day.
What to do
- Marketplace-only: keep each marketplace's written statement (or other proof) that it is registered with CDTFA and responsible for the tax, plus its permit or account number, which you can check on CDTFA's Verify a Permit page.
- Selling direct: register for a free seller's permit through CDTFA online services before your first sale.
- Buying inventory: use CDTFA-230 if you hold a permit, or a resale certificate with all six essential elements and the facilitator's number if you don't.
- Unsure whether your sales are occasional or a business? Check with a tax professional or CDTFA.
Common questions
Is a California seller's permit free?
Yes. CDTFA says there is no charge for a seller's permit, though it may ask for a security deposit based on the type of business and expected taxable sales.
Do I need a California seller's permit to sell on an online auction site?
CDTFA says online sales of merchandise are generally taxable even through online auction houses. Some of them are marketplace facilitators, which are the retailer and collect and report the tax; if the one you use isn't, you must hold a seller's permit and report the tax yourself.
Is a seller's permit the same as a resale number?
CDTFA says people sometimes call a seller's permit a resale number or resale permit; the permit lets you sell and issue resale certificates to suppliers.
Can I buy inventory tax-free without a California seller's permit?
If all your sales are facilitated by a registered marketplace facilitator, CDTFA says you may issue a resale certificate that explains why you need no permit and gives the facilitator's permit or account number.
Related
- Seller's permits by state: marketplace-only sellers, resale certificates and garage sales on one table
- California: marketplace sales tax and 1099-K rules
- Arkansas: do you need a seller's permit?
- Connecticut: do you need a seller's permit?
- Form 1099-K for resellers: the federal test
- Do eBay's fees apply to the sales tax a buyer pays?
- Where each selling app keeps its sales report
General information, not tax or legal advice
This page summarizes California's own published pages, rules and statutes as read on . It doesn't say whether you must register, what you should file or whether you owe tax: that turns on your own sales, where you sell and what you buy. Rules change. Check with a tax professional, or ask the California Department of Tax and Fee Administration (CDTFA) directly.
Sources
Official pages this page is built from, with the day each was read.
- California Department of Tax and Fee Administration: Tax Guide for Marketplace Facilitator Act; read . Marketplace sellers' registration, direct sales, resale certificate elements.
- California Department of Tax and Fee Administration: Publication 107, Do You Need a California Seller's Permit?; read . Who needs a permit, occasional sales, resale certificate misuse.
- California Department of Tax and Fee Administration: Publication 107, Applying for a Seller's Permit; read . No charge for a permit; security deposit; how to register.
- California Department of Tax and Fee Administration: Obtaining a Seller's Permit; read . No fee; free online registration.
- California Department of Tax and Fee Administration: Publication 103, Sales for Resale; read . CDTFA-230 and good-faith acceptance.
- California Department of Tax and Fee Administration: CDTFA-230, General Resale Certificate; read . Form text and misuse penalty.
- California Department of Tax and Fee Administration: Tax Guide for Home-Based Businesses: Industry Topics; read . Garage sales, swap meets, temporary permits.
- California Department of Tax and Fee Administration: Regulation 1595, Occasional Sales—Sale of a Business—Business Reorganization; read . Three sales in 12 months requires a permit.
- California Department of Tax and Fee Administration: Temporary Sellers; read . Online auction sales and marketplace facilitators; permits for resellers of used items, even temporarily; sub-permits for temporary locations.
Free 1-page Reseller Cheat Sheet: fees on 8 platforms, Media Mail and stamp prices
What each platform takes from a $10, $25 and $50 sale, Media Mail 1-10 lb, Ground Advantage to Zones 1, 5 and 8, and the Forever stamp, on one printable page. The link appears as soon as you sign up.