California sales tax for online sellers: nexus, permit and filing

What is the California sales tax rate?

The statewide base rate is 7.25%. Many cities and counties add district taxes on top, so the combined rate depends on where the goods are delivered. Use the CDTFA's rate lookup by address.

When does an online seller have to collect in California?

You must register and collect if you have a physical presence in California, such as an office, staff or inventory, or if your total sales into California exceed $500,000 in the current or previous calendar year. California counts sales made through marketplaces towards that $500,000, even though the marketplace collects the tax on them.

How nexus works in general is covered in physical vs economic nexus and economic nexus explained.

What if you sell on Amazon, eBay or Etsy?

California requires marketplace facilitators to collect and remit sales tax on the sales they facilitate, so you do not collect on those orders. Your own website and other direct channels remain your responsibility. See marketplace facilitator laws.

How do you register?

Apply online with the California Department of Tax and Fee Administration for a seller's permit. There is no fee for the permit, but the CDTFA may ask for a security deposit in some cases. A seller whose retail sales in California are all made through registered marketplace facilitators is generally not required to hold a seller's permit.

What are the steps once you have nexus?

1. Confirm nexus

   Check your presence and your sales into California against its threshold.

2. Register before collecting

   With the California tax agency, as set out above.

3. Set up your store

   Charge the correct combined rate for each delivery address and product.

4. File and pay

   On the schedule California assigns, including zero returns where required.

How are returns filed?

The CDTFA assigns a filing frequency, quarterly, quarterly with prepayments, monthly or yearly, based on your expected tax. Returns are filed online and report sales by district where district taxes apply.

See how to file a sales tax return.

Does FBA inventory in California matter?

Inventory stored in California is a physical presence. California does not require a seller's permit if all your retail sales are through registered marketplaces, but direct sales change that. See sales tax for Amazon FBA sellers.

What else should sellers know?

• Sellers outside the US: the same rules apply wherever the business is based. See selling on Amazon US as a non-resident.
• Late registration: tax you should have collected becomes your own debt. See voluntary disclosure agreements and collected but not remitted.
• Records: keep sales by delivery address, tax collected and any certificates. See exemption certificates and sales tax audits.
• Stopping: returns stay due until the account is closed. See filing frequency and cancelling a sales tax permit.
• Store settings: switch on collection only once you are registered. See Shopify sales tax setup.

This guide is general information. It is not tax or legal advice for your situation.