What Kinds of Online Businesses Need a Seller’s Permit?
Just as with physical business, any online business selling tangible personal property typically subject to sales tax if sold at retail needs a seller’s permit.
This includes businesses selling tangible goods from their own online storefront, and anyone who has made three or more sales in a 12-month period at online classified sites and internet auction sites or houses. A permit is also needed for any online business selling tangible goods via a third-party website like Shopify or ArtFire.
Seller’s Permits, Business Licenses, and Resale Licenses
Many who are looking to start an online business assume they don’t need a seller’s permit due to already possessing a business license. The reality is that both a seller’s permit and a business license are necessary in order to conduct business online in California.
It’s often assumed that “seller’s permit” and “resale license” mean the same thing. However, they are two different things. While a seller’s permit allows business owners to collect sales tax, a resale license exempts a business from paying additional tax when they purchase goods they plan to sell.