Do You Need a California Seller's Permit? (Publication 107)
Required Registration to Report Use Tax

Qualified Purchasers

A "qualified purchaser" must register with us and annually report and pay use tax directly to us, as required by Revenue and Taxation Code section 6225. If you are not required to hold a seller’s permit and are not currently registered with us for use tax purposes, you may be required to register as a "qualified purchaser."

Prior to January 1, 2024, a "qualified purchaser" was defined as a person that received at least $100,000 in gross receipts from their business operations per calendar year and was not otherwise required to be registered with us. Gross receipts are the total of all receipts from both in-state and out-of-state business operations.

Beginning January 1, 2024, the definition of a "qualified purchaser" was revised* to eliminate the requirement that the person receives at least $100,000 in gross receipts per calendar year from business operations. It instead requires that the person makes more than $10,000 in purchases subject to use tax (excluding vehicles, vessels, or aircraft) per calendar year if the use tax imposed on those purchases has not otherwise been paid to a retailer engaged in business in this state or authorized to collect the tax. This change is effective from January 1, 2024, through December 31, 2028.

On January 1, 2029, that definition of a "qualified purchaser" will revert to a person receiving at least $100,000 in gross receipts per calendar year from business operations.

You can register on our website at www.cdtfa.ca.gov by selecting Register Online under Register for a Permit and then selecting Register a New Business Activity. Once you have registered, you may pay any use tax due after filing your return. You can also register in person at any of our offices to report use tax.

For additional information, see publication 126, Mandatory Use Tax Registration for Service Enterprises.

*See Assembly Bill 1097 (Stats. 2023, ch. 355).

Out-of-State Retailers

If you are a retailer located outside of California, you are required to register with us and collect California use tax on your taxable sales and report and pay the tax to us if you are "engaged in business in this state." You are engaged in business in this state if you are a retailer that:

• Owns or leases real or tangible personal property, including a computer server, in California;
• Maintains, occupies, or uses, directly or indirectly, or through a subsidiary or agent, a permanent or temporary office, place of distribution, sales or sample room, warehouse or storage place, or other physical place of business in California (whether or not it is related to your sales activities);
• Has people operating in California under your authority for the purpose of selling, delivering, installing, assembling, or taking orders for tangible personal property;
• Derives rentals from a lease of tangible personal property (including vehicles, vessels, and aircraft) situated in California; or
• Beginning April 1, 2019, has total combined sales of tangible personal property for delivery in California by you and all people related to you that exceed $500,000 during the preceding or current calendar year.

Offering merchandise for sale over the phone, by mail order, or online will generally not, by itself, cause a retailer to be engaged in business in California. Also, using a website hosted on servers located in California will generally not, by itself, cause a retailer to be engaged in business in California.

For more information about California state, local, and district use tax collection requirements, please see our online guide, Use Tax Collection Requirements Based on Sales into California Due to the Wayfair Decision, publication 77, Out-of-State Sellers: Do You Need to Register with California?, and publication 44, District Taxes (Sales and Use Taxes).