Publication 77, Out-of-State Sellers: Do You Need to Register with California?

July 2019

Engaged in Business

Engaged in Business in California

If you are a retailer located outside California, you are required to register with the California Department of Tax and Fee Administration (CDTFA) and collect California use tax on your taxable sales and report and pay the tax to the CDTFA if you are "engaged in business in this state." You are engaged in business in this state if any of the following situations apply to your business:

1. Business location in California

You maintain, occupy, or use, 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.

2. Representative in California

You have a representative, agent, or independent contractor operating in the state on your behalf or under your authority, or under the authority of your subsidiary, for the purpose of making sales, taking orders, assembling or installing merchandise, training customers, making deliveries, or otherwise establishing or maintaining a market for your products.

3. Lease property in California

You receive rental payments from the lease of personal property that is located in California, such as lease of machinery, equipment, and furniture. For more on leases, see our publication 46, Leasing Tangible Personal Property.

4. Real or Personal Property

You own or lease real property or personal property located in California such as machinery, equipment, furniture, or a computer server.

5. Sales for Delivery in California

Beginning April 1, 2019, you are engaged in business in this state if, during the preceding or current calendar year, the total combined sales of tangible personal property for delivery in California by you and all persons related to you exceed $500,000. A person is related to you if they have a relationship with you as described in Internal Revenue Code section 267(b) and the related regulations. Prior to April 1, 2019, you would not be engaged in business in this state based upon your sales for delivery in California.

For more information about California state, local, and district use tax collection requirements, please see Use Tax Collection Requirements Based on Sales into California Due to the Wayfair Decision.

Courtesy Collection of Use Tax

California consumers are responsible for paying the state, local, and district use tax on purchases from retailers that do not collect the tax. If you are not required to register with the CDTFA, you may choose to voluntarily register with the CDTFA for a Certificate of Registration–Use Tax to collect and pay use tax as a convenience to your California customers. If you hold such a certificate, you will be required to collect and pay tax from purchasers in the same manner as retailers engaged in business in this state. Your obligation to collect and pay tax will continue until you close out your Certificate of Registration–Use Tax.

Registration

If you are not currently registered with the CDTFA, you may register with us online.

From our Taxpayer Online Services Portal, scroll down to Registration, select Register a New Business Activity or Location, and follow the prompts.

In addition to holding a seller's permit or Certificate of Registration–Use Tax, you may also need to register for another license or permit with the CDTFA. For more information about the permits or licenses CDTFA administers and the registration requirements please see the Additional Accounts, Licenses, Permits tab.

Please note: This publication summarizes the law and applicable regulations in effect when the publication was written, as noted on the cover. 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.

Examples — Required to Register

Below are some common examples of situations that would require a retailer to register with the California Department of Tax and Fee Administration (CDTFA) for sales and use tax purposes.

Retailer with Stocks of Merchandise (Inventory)

If you maintain stocks of merchandise in this state, then you must hold at least one seller's permit.

Please note: You are not required to hold a seller's permit if all of your sales are made exclusively in interstate or foreign commerce.

Retailer Using Fulfillment Center in California

If you use a California fulfillment center to store your inventory, you are required to register with the CDTFA and file sales and use tax returns. For more information, see our online guide, Fulfillment Centers.

Retailer with Sales Representative in California

If you have a sales representative soliciting sales in California you are required to register with the CDTFA.

Retailer Installing Property in California

If you install tangible personal property in California using your own employees or independent contractors, you are required to register with the CDTFA.

For example: You maintain a single facility in Arizona where you design and sell computer systems. All of your sales are made by mail order or over the Internet. However, on request, you send employees to California to install the equipment for your customers.

Retailer Providing Training in California

You provide training services in California related to goods or merchandise you sell.

For example: Your Virginia-based business does not have sales representatives or inventory in California. However, one of your customer service representatives routinely comes to California to provide training on the computer equipment you sell.

Retailer Leasing Property to Customers for Use in California

You receive payments from the lease of equipment or merchandise located in California and you have not already paid California sales or use tax on the purchase of that equipment or merchandise.

For example: Your Nevada car dealership leases cars to California residents who drive them in this state. You have no other business connection to California.

Retailer Selling Goods for Delivery in California

Beginning April 1, 2019, the total combined sales of tangible personal property for delivery in California by you and all persons related to you exceed $500,000 during the preceding or current calendar year. See our online guide Use Tax Collection Requirements Based on Sales into California Due to the Wayfair Decision.

Not Required To Register

You are not engaged in business in California and generally are not required to register to report and pay California sales and/or use tax solely based on one or more transactions illustrated in the following examples:

1. Convention and Trade Show Activities

  • To participate in convention and trade show activities for not more than 15 days during any 12-month period, and
  • During the prior calendar year, you did not earn more than $100,000 of net income from those activities in this state.

However, if you sell merchandise at the trade show, or take orders for merchandise delivered later to California customers, you must pay tax on those sales.

If you qualify for this trade show exception, you may register to obtain a temporary permit to sell products at the qualifying trade shows and you are responsible for the tax due with respect to sales you make or orders you take at the trade shows.

2. Warranty and Repair Services

Your only connection is the use of an independent representative or independent contractor in California to perform warranty or repair services for the products you sell provided that the ownership of the representative or independent contractor and your business is not substantially similar.

Please note: if the products you sell or supply in performance of the repair exceed $500,000, you will be required to register for a Certificate of Registration – Use Tax. For more information on services, please see publication 108, Labor Charges.

Additional Accounts, Licenses, and Permits

If you are required to register in California for a Seller's Permit or a Certificate of Registration – Use Tax, you may have other registration and fee collection requirements.

California Tire Fee

If you sell new tires or vehicles and equipment that include new tires, then you are required to collect a California Tire Fee from the retail purchaser. The California Tire Fee is imposed on the retail purchase of new tires. A retailer is required to collect from the retail purchaser the amount of the fee on each tire when the retailer sells or leases new or used motor vehicles, trailers, farm equipment, or construction equipment that include new tires (including the spare), or sells new tires for use with, but sold separately from, on-road or off-road motor vehicles, trailers, motorized equipment, construction equipment, or farm equipment.

For more information on the California Tire Fee, the current rate, and registration requirements, see publication 91, California Tire Fee.

Covered Electronic Waste Recycling (eWaste) Fee

If you sell covered electronic devices, then you are required to collect a Covered Electronic Waste Recycling (eWaste) Fee from the retail purchaser/leasee. The eWaste Fee is imposed on the retail purchase or lease of "covered electronic devices," which are video display products the Department of Toxic Substances Control (DTSC) has determined to be hazardous when discarded. These devices include computer monitors, laptop computers, portable DVD players with LCD screens, "bare" cathode ray tubes (CRTs) and devices containing CRTs, televisions with LCD screens, plasma screens, or CRTs. The fee varies depending on the screen size. Please see the eWaste Fee rates posted on our website.

For more information on the eWaste Fee and registration requirements, see publication 95, Electronic Waste Recycling Fee.

Lead-Acid Battery Fee

If you sell or manufacture lead-acid batteries that are sold into California, then you are required to register for the California Lead-Acid Battery Fee and/or the Manufacturer Battery Fee. The Lead-Acid Battery Fee is imposed on the retail purchaser of a replacement lead-acid battery in California. It is a fee that is collected by the retailer or a manufacturer making retail sales. A replacement lead-acid battery includes a new battery sold at retail to replace the battery that originally came with the vehicle, equipment, watercraft, or aircraft.

In addition to the Lead-Acid Battery Fee, there is a Manufacturer Battery Fee. This fee is imposed on the manufacturer for each lead-acid battery sold at retail in California, or sold to a dealer, wholesaler, distributor, or other person for retail sale in California. A person who imports lead-acid batteries into California from an out-of-state manufacturer, without jurisdiction in California, is considered the manufacturer.

For more information on the Lead-Acid Battery Fee, the current rate, and registration requirements, see our online Tax Guide for Lead-Acid Battery Fees.

Lumber Products Assessment

An assessment is imposed on persons who purchase lumber products or engineered wood products for storage, use, or other consumption in California, at the rate of one percent (1%) of the sales price. Retailers of lumber products or engineered wood products are required to collect the one percent assessment from the purchaser on their sales of these items to consumers in California.

In general, lumber products and engineered wood products subject to the one percent lumber products assessment are building products, usually used in construction, which are comprised of at least 10% wood.

Retailers responsible for collecting the one percent lumber products assessment on sales of lumber products or engineered wood products are required to register for a Lumber Assessment account in addition to registering for a seller's permit or Certificate of Registration–Use Tax.

For more information, please see our online Tax Guide for California Lumber Products Assessment.

Additional information

Find a California Tax Rate by Address

Contact us:

Visit our website at: www.cdtfa.ca.gov
Customer Service Center: 1-800-400-7115 (TTY:711)
Customer service representatives are available Monday through Friday from 8:00 a.m. to 5:00 p.m. (Pacific time) Friday, except state holidays.

Taxpayers’ Rights Advocate

Call toll-free for help with problems you have not been able to resolve through normal channels: 1-888-324-2798.

Law References

Revenue and Taxation Code section 6203, Collection by Retailer

Regulation 1684, Collection of Use Tax by Retailers

Publications

91 California Tire Fee

95 Electronic Waste Recycling Fee

100 Shipping and Delivery Charges

105 District Taxes and Sales Delivered in California

108 Labor Charges

109 Internet Sales

110 California Use Tax Basics

116 Sales and Use Tax Records

178 Voluntary Disclosure Program