Tax Guide for Out-of-State Retailers
Registration

Although you are not located in California, you may be required to register with us to collect and report tax on your sales to California customers.

Do You Need to Register with California?

You are required to register with us if you are considered engaged in business in California.

Even if you are not required to register, you may voluntarily register for a Certificate of Registration – Use Tax to collect and pay use tax as a convenience to your California customers. Visit the Registration page of our Online Services and follow the steps to register your business with us.

If you are an online retailer, additional registration information that you may find helpful is available in the Online Retailers: Registration and Local Tax section of our Local and District Tax Guide for Retailers.

How Do You Know if You Are Engaged in Business in California?

There are five common ways in which you can be considered engaged in business in California. If any of the following situations apply to you, you are required to collect and pay sales or use tax.

  • 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.
  • You have representatives, agents, or independent contractors operating in California on your behalf or under your authority, or under the authority of your subsidiary, for purposes of making sales, taking orders, assembling or installing merchandise, training customers, making deliveries, or otherwise establishing or maintaining a market for your products.
  • You receive rental payments from the leases of tangible personal property located in California, such as leases of machinery, equipment, and furniture.
  • You own or lease real property or personal property such as, machinery or equipment, furniture, or computer servers located in California.
  • You have total combined sales of tangible personal property for delivery in California exceeding $500,000 during the preceding or current calendar year.

Did you receive CDTFA 790, California Nexus Questionnaire?

Your business activities in this state may require you to register under the State of California Sales and Use Tax Law.

  • Complete and return the questionnaire to the address that is provided at the bottom of the form.
  • If you have any questions regarding the questionnaire or registration, a contact person, telephone number, and email address are provided at the bottom of the form.

For more information refer to Regulation 1684, Collection of Use Tax by Retailers, Revenue and Taxation Code (RTC) 6203, Collection by Retailer, and our online tax guide Use Tax Collection Requirements Based on Sales into California Due to the Wayfair Decision.

Convention and Trade Show Activities

There is an exception to being engaged in business when you are only involved in convention and trade shows in California.

If your presence in California for conventions or trade shows is not more than fifteen days, in whole or in part, during any 12-month period and you do not derive more than $100,000 of net income during the prior calendar year from these shows, you are not considered engaged in business in California and you are not required to register for an ongoing permit. You must still collect and pay the use tax on the sales made during the event even though you are not required to hold an ongoing permit. You should register with us for a temporary permit to report tax on sales you make during the event.

Sales Made on State-Designated Fairgrounds

If you are a retailer who makes sales of tangible personal property that take place on the real property of a California state-designated fair (state-designated fairground), you must separately state the amount of those sales on your sales and use tax return. Sales that take place on state-designated fairgrounds include over-the-counter sales on the fairgrounds and also may include sales in which the property is shipped or delivered to or from the fairground.

The separately reported amount will be used for funding allocation purposes only. There is no additional tax or fee due on these sales. For more information on the reporting requirement, refer to our Tax Guide for Reporting Requirements on State-Designated Fairgrounds.

Voluntary Disclosure

If you are an out-of-state business in California, and have past due tax liabilities but are not registered, you are encouraged to apply for the Out-of-State Voluntary Disclosure Program.

Voluntary disclosure provides taxpayers with the following benefits:

  • Limits the statutory period for assessments against unpaid tax to three years instead of eight.
  • Allows us to waive late filing and late payment penalties.
  • Allows you to anonymously obtain a written opinion regarding whether you will be approved for a voluntary disclosure request.

To qualify for this program, you must meet the following five conditions:

  • Be located outside California and cannot have been previously registered with us,
  • Be engaged in business in California,
  • Register voluntarily with us,
  • Have not been previously contacted by us or our agents regarding your activities in California, and
  • Your inability to pay the tax or file a return was due to reasonable cause and not as a result of negligence or intentional disregard of the law.

The Out-of-State Voluntary Disclosure Program is not applicable to cases involving:

  • Any Purchases that are subject to the California use tax.
  • Sales by a person, registered or unregistered which are subject to California sales tax.
  • Any person who currently holds or has held a seller's permit.

Refer to RTC 6487.05, Deficiency determination; unregistered out-of-state retailers for information about the Out-of-State Voluntary Disclosure Program.

How to Request a Written Opinion

To request an opinion on whether we might approve your voluntary disclosure request or to discuss your eligibility for consideration under the program, please contact the Voluntary Disclosure Specialist through one of the following methods:

California Department of Tax and Fee Administration
Voluntary Disclosure Program
PO Box 942879 (MIC: 44)
Sacramento CA 94279-0044
1-916-309-5223
1-916-227-6600
1-916-322-0187 (fax)
(voluntary.disclosure@cdtfa.ca.gov)

To receive the most accurate response possible to your request, please include the following:

  • A description of how you meet all of the qualifications listed above.
  • A description of your business activities, including how products are marketed and sold to California customers.
  • A detailed description of the flow of goods to the customer from the time an order is placed.

How Do You Apply for Voluntary Disclosure?

Follow the instructions on how to apply for the Out-of-State Voluntary Disclosure Program found in publication 178, Voluntary Disclosure Program.

Potential Disqualification for the Franchise Tax Board Voluntary Disclosure Program

Registration is required prior to applying for the Voluntary Disclosure Program (as discussed in publication 178, Voluntary Disclosure Program). The CDTFA online registration has an optional field for applicants to disclose their Secretary of State (SOS) number during the completion of the online registration process. If you intend to apply for the voluntary disclosure program with the Franchise Tax Board (FTB), please note that establishing your SOS number prior to applying for the voluntary disclosure program with FTB will disqualify you from participating in the voluntary disclosure program with the FTB. For more information regarding the voluntary disclosure program with FTB, visit www.ftb.ca.gov.

Prepaid Mobile Telephony Services

Sellers of prepaid mobile telephony services (MTS), such as prepaid minutes and airtime, have certain surcharge and local charge collection requirements.

Sellers of prepaid MTS must collect the Emergency Telephone Users Surcharges for both 911 and 988 as flat fees on each purchase of prepaid MTS in addition to collecting local charges as a percentage of total prepaid MTS retail sales (if local charges apply). The 911 Surcharge, 988 Surcharge, and local charges are due on each retail transaction that involves a sale of prepaid MTS to a California consumer, unless otherwise exempt.

The 911 Surcharge, 988 Surcharge, and local charges (if local charges apply) generally apply to amounts charged for:

  • Prepaid wireless airtime cards
  • Prepaid wireless cards compatible with pay-as-you-go cell phones
  • Prepaid wireless minutes
  • Prepaid wireless plans
  • Prepaid wireless refill or top-off cards
  • Prepaid wireless e-Cards
  • Prepaid mobile data or any other services when sold with any of the above
  • Any product or service (except a cell phone), when sold with prepaid MTS for a single non-itemized price
  • A cell phone sold with prepaid MTS for a single non-itemized price, unless only a minimal amount of prepaid MTS is transferred. (A minimal amount of prepaid MTS is $5 or less, or 10 minutes or less)

The current 911 Surcharge rate, 988 Surcharge rate, and local charge rates may be found on our 911 Surcharge, 988 Surcharge rate, and Local Charge Rates webpage.

If you sell prepaid wireless products and services to California consumers, you must register with us as a prepaid MTS seller. The prepaid MTS account is a separate account from your seller's permit. For more information about your collection requirements as a sellers of prepaid MTS, refer to our Tax Guide for Sellers of Prepaid Mobile Telephony Services (MTS) and Telecommunication Service Suppliers.

California Tire Fee

The California Tire Fee is a fee imposed upon the purchase of a new tire. We administer the program in cooperation with the Department of Resources Recycling and Recovery (CalRecycle) and the California Air Resources Board (ARB).

If you are required to have a California seller's permit or Certificate of Registration – Use Tax, you must register for a California Tire Fee account and collect the fee when you sell tires to California retail customers. If you are not sure whether you need to register and collect sales or use tax, refer to our Tire Fee Program webpage for more information, or call our Customer Service Center at 1-800-400-7115 (TTY:711).

If you are not required to register for a California Tire Fee account, you may voluntarily register to collect and pay the tire fee as a courtesy to your California customers. Upon collecting the tire fee, you must provide the customer with an invoice or similar document that lists the tire fee as a separate charge. A copy of the invoice or similar document should be kept by both the seller and purchaser.

If you do not have a California Tire Fee account, the California purchaser must pay the fee directly to us.

Cigarettes and Tobacco Products

Prevent All Cigarette Trafficking (PACT) Act

Cigarettes, Roll-Your-Own Tobacco, Smokeless Tobacco Products, and Electronic Nicotine Delivery Systems (ENDS)

As provided by federal law (Jenkins Act), any person who sells, transfers, or ships for profit cigarettes, roll-your-own/smokeless tobacco, or (ENDS) in interstate commerce, whereby such cigarettes, roll-your-own/smokeless tobacco, or ENDS are shipped into a state (such as California), a locality, or a Native American reservation of a Native American tribe taxing the sale or use of cigarettes, roll-your-own/smokeless tobacco, or ENDS, or who advertises or offers cigarettes, roll-your-own/smokeless tobacco, or ENDS for such a sale, transfer, or shipment must register and file monthly reports with the state tobacco tax administrator (such as California Department of Tax and Fee Administration [CDTFA]) into which shipment is made or in which such advertisement or offer is disseminated.

For more information, refer to the Prevent All Cigarette Trafficking (PACT) Act Enhances the Requirements of the Federal Jenkins Act webpage.

You must provide the buyer's name and address, the brand, and quantity of cigarettes sold or transferred.

California Electronic Cigarette Excise Tax

Retailers of electronic cigarettes (in-state or out-of-state) are required to collect from the purchaser at the time of sale the California Electronic Cigarette Excise Tax (CECET) at the rate of 12.5 percent (12.50%) of the retail selling price of electronic cigarettes containing or sold with nicotine. The collection of the CECET is in addition to the sales and use tax.

If you sell electronic cigarettes containing or sold with nicotine to a California consumer, you are required to have a CECET permit (account) in addition to any other required license, permit, or account.

For more information, refer to our Tax Guide for California Electronic Cigarette Excise Tax.

Covered Electronic Waste Recycling Fee

If you sell a video display device or a covered battery-embedded product to a California customer and you are registered, or should be registered, for a California seller's permit to collect California use tax, you are required to have an eWaste fee account or a covered battery-embedded waste recycling fee account, or both, depending on the type of product you sell. If you are not required to collect the fee, your customer owes it.

If the sale is subject to California sales tax, and the item is a video display device or a covered battery-embedded product, the eWaste fee or covered battery-embedded recycling fee is due. For more information, refer to our Covered Electronic Waste Recycling Fees Guide.

Alcoholic Beverage Tax

Wine Direct Shippers

Commercial winegrowers who sell and ship wine directly to California customers must register with us and also have a wine direct shipper permit.

The wine direct shipper permit allows winegrowers to ship up to two cases of wine per month directly to a California resident for personal use. The buyer must be at least 21 years old and may not resell the wine.

Beer Manufacturer

Beer manufacturers who ship beer manufactured outside of California to licensed importers within California must have an Out-of-State Beer Manufacturer Certificate.

Craft Distillers

A Craft Distiller Direct Shipper permit issued by the California Department of Alcoholic Beverage Control (ABC), is required for California craft distillers or qualifying out-of-state distillers to ship spirits they manufacture or produce directly to California consumers. To learn more about the Craft Distiller Direct Shipper permit, visit ABC's industry advisory notice.

Alcohol licenses, certificates, and permits must be obtained from ABC. After you apply with ABC, we will notify you of which CDTFA Alcoholic Beverage Tax Account type you are required to register for in addition to a seller's permit.

For more information about the California Alcoholic Beverage Tax, visit our Tax Guide for Alcoholic Beverage Tax, Tax Guide for Winemakers, and Tax Guide for Distillers and Distributors of Distilled Spirits. For more information about alcoholic beverage licenses, certificates, and permits, visit ABC's website.

Registration

Online Registration – Register with us for your seller's permit or other necessary permits, or add a business location to an existing account. Refer to our Online Services webpage for resources on how to update your account.

Please note: You may be contacted for verifying documentation (copies of your driver's license, Articles of Incorporation, and so on.) before your registration can be finalized and an account issued.

Filing and Payments

After you have registered you may find these links helpful.