Online Sales Tax in California
We’re all familiar with the sales tax that we have to pay when purchasing goods and items in a store. As an online business, there are also tax requirements that you’ll need to be aware of. Once you’re ready to sell products through your online store, it’s important that you’re aware of California sales tax laws, as well as other state tax liability.
Even if your business doesn’t have a physical location, you’re still required to charge and collect sales tax on all purchases, including those in and outside of California. Because you provide tangible items to customers, you’re liable to pay sales tax.
However, there are non-taxable items to be aware of. Items that don’t require sales tax to be paid include:
- Cold food products
- Resale items
- Electronically transmitted items (i.e., software, digital media, etc.)
If you sell any of these items, you don’t have to worry about collecting or paying California state tax.
Why You Need a Seller’s Permit
Another must-do before you can open your business’s e-doors is to obtain a seller’s permit. Having a seller’s permit is what allows you to legally sell items at a retail or wholesale level. To obtain a seller’s permit, you’ll need to register your business with the California State Board of Equalization (BOE).
Once you have a seller’s permit, you can then issue resale certificates to any of your suppliers. This allows you to purchase items without having to pay California taxes or other state taxes, depending on the location of the supplier.
