Internet Auction Sales and Purchases (Publication 177)

If you are making sales of tangible personal property in California using an Internet auction house or shopping platform, you may be required to register with the California Department of Tax and Fee Administration (CDTFA) and report and pay tax on your sales. "Tangible personal property" (merchandise) means personal property which may be seen, weighed, measured, felt, or touched, or which is in any other manner perceptible to the senses.

California permit requirements

Generally, a person in California who makes three or more sales of merchandise in a 12-month period is required to hold a seller's permit. This is true regardless of whether the sales are at retail or for resale. When you sell merchandise in California, even temporarily, you are generally required to register with the CDTFA, and to pay sales tax on your taxable sales.

Please see publication 107, Do You Need a California Seller's Permit?

Internet sales

There is no general tax exemption for sales of tangible personal property made over the Internet.

Internet sales are treated just like sales made by sales representatives, at retail stores, over the telephone, or by mail order. Therefore, your retail Internet sales that take place in California, or to California consumers, are generally subject to sales or use tax, unless a specific exemption or exclusion applies.

For more information please see publication 109, Internet Sales.

Internet auction houses

If you list your merchandise to sell, seek bids, accept a bid from the highest bidder, and transfer the merchandise to the purchaser through Internet auction houses, you are generally considered the retailer in your transactions. This is true whether you receive the funds or have a third party collect the funds on your behalf.

Internet auction houses differ from most online companies by offering a service to other retailers allowing the retailers to post their merchandise for sale on the auction house's site. Your sales made through Internet auction houses or sites that offer online classified advertisements (online advertisers) are generally subject to California sales tax. Currently, Internet auction houses are generally not considered retailers and are not responsible for collecting tax on those transactions. These businesses aid sellers and sales are the responsibility of the holder of the property. It should be noted, however, that this may be subject to change beginning October 1, 2019 (please see New Requirements for Marketplace Facilitators Beginning October 1, 2019 section below).

New requirements for marketplace facilitators beginning October 1, 2019

Beginning October 1, 2019, a marketplace facilitator (as defined by Revenue and Taxation Code section 6041) is considered the seller and retailer for each sale facilitated through its marketplace (for example, Internet website) for purposes of determining whether the marketplace facilitator is required to register with the CDTFA for a seller's permit or Certification of Registration – Use Tax. Also, a marketplace facilitator that is registered with the CDTFA or required to register with the CDTFA for a seller's permit or Certificate of Registration – Use Tax, is the seller and retailer for each retail sale it facilitates for a marketplace seller through its marketplace. As such, the marketplace facilitator will be required to pay sales tax or collect and remit use tax on each retail sale facilitated for a marketplace seller through its marketplace. We will update our website and issue a special notice with more information about the new requirements for marketplace facilitators. Please check our website at www.cdtfa.ca.gov for updates.

Please note: This publication summarizes the law and applicable regulations in effect when the publication was written, as noted above. However, changes in the law or in regulations may have occurred since that time. If there is a conflict between the text in this publication and the law, decisions will be based on the law and not on this publication.