A California seller permit is required in the state to conduct business and to sell or lease tangible personal property. California startups, or others engaged in business activities without a valid seller’s permit, are violating the Sales and Use Tax Law and are at high risk of being charged penalties in more than one form, including having their permits revoked.
How Does Revocation of a Seller’s Permit Occur?
Every person who possesses a seller’s permit has a responsibility to ensure that certain tasks are completed. For example, all who hold this permit must file their sales and use tax returns. They must also pay any tax for use and sales on both their purchases and sales. Failure to do so can result in revocation.
Those who hold this permit must also keep adequate records of their purchases and sales. Not doing so can also result in revocation of your seller’s permit. If you have obtained a permit for the purpose of avoiding paying tax on items you use and are caught, revocation of your permit may become a reality for you.
Consequences of Doing Business Without a Valid Seller's Permit
If you engage in business in the state without a wholesale license in California and are caught doing so, you can be found guilty of a misdemeanor. This charge can take the form of a fine of up to $5,000 or one year’s jail time, or both. This applies to each violation.
In corporations, each officer can be found guilty and charged the above fine and/or jail term for each violation. Being charged not only places your business at risk but also can make it far more difficult to obtain a seller’s permit in the future.
Avoiding Seller’s Permit Revocation
There are many ways to avoid revocation of your seller’s permit. Your records must include physical or digital books of account, with some form of a summary of your income and expenses.
To avoid revocation, it’s also vital to ensure there are documents which support the information reflected in your records. These include receipts, contracts, bills, invoices, and other documents. The gross income of your business must be supported by receipts for the lease and sale of any merchandise.
You must also file tax returns for sales and use with the Board of Equalization (BOE) on a periodic basis, and have copies of the worksheets and documents used to prepare these returns. All deductions you have claimed on your tax returns must also be reflected in your records.
Get Your Seller Permit Today
Responsible businesses have seller’s permits. If you want to start doing business as soon as possible, it only makes sense to get your permit quickly.
FastFilings.com has filed more California seller’s permits than any other third party filing service in the country, and we file your requests directly with the BOE. Find out how easy it is to get a wholesale license in California online with Fast Filings