Yes. If you are a California resident who regularly sells tangible items over the internet, then you need a seller’s permit for your online business. Any individual or business who makes more than two online sales of tangible property during any 12-month period must first obtain a seller permit from the state of California.
Do I Need Permits if I Sell All My Goods Online?
Yes. Even if you store all of your inventory at home and exclusively sell online, you must still get a permit before making any transactions. Anyone engaged in selling tangible items on a regular basis is subject to the legal requirements governing vendors.
Why Do I Need a Permit
A seller permit bestows both an obligation and a right. As a retailer, you have the obligation to pay sales tax to the government. With a permit, you have the right to collect those taxes from California customers in order to offset the cost. In order to comply with the law, you must first obtain the permit, then remit sales tax on all items you sell (unless the items are specifically exempted or you have filled out a tax exempt form), and finally report all collected taxes to the state Board of Equalization.
What if I’m Already Licensed to Do Business in California
You must get a seller’s permit for your online business even if you already have a business license. That’s because a seller’s license or permit is distinct from business permits or licenses. The former allows you to collect sales tax from California customers, and the latter gives you permission to do business in the state.
Is a Seller’s Permit the Same as a Resale License
No. A resale license allows you to buy inventory from a supplier without paying tax. In other words, it exempts your business from paying additional taxes when you buy goods that you will later sell. It has nothing to do with your obligation to collect taxes from your customers.
Which E-Commerce Platforms Require a Permit
The permit law applies whether you sell items through your own online store, a third-party website such as Amazon or Etsy, or an online auction platform such as eBay or uBid. You must also get a permit if you regularly sell goods through online classified ads such as Craigslist.