The acquisition of a seller’s permit is an indispensable step, if you’re a businessperson who is going to sell goods and services in California. It will be a kind of assurance, as far as taxation compliance with the California state taxes is concerned.
Obtaining a seller’s permit is a relatively simple process, which will require you to register your business in the State Board of Equalization (SBE) and will make you recognized by the California Department of Tax and Fee Administration (CDTFA). First, pull together critical business information like type of business, business address, and FEIN so that you can register and file your business. Afterwards, go to CDTFA’s web platform or file form CDTFA-400 SP with your application.
Make sure you are ready to go in-depth into the products or services you want to sell along the lines of the volume you wish to sell. When the application is submitted, the CDTFA will be reviewing it, and after the approval process, you will get the seller’s permit that will be your gateway to operate in the state of California legally.
Below we discuss how to apply for a California’s seller’s permit.
Understand the Requirement
First of all, before getting into the application process, a seller’s permit should be clearly and fully understood by your mind and why is it required.
In California sellers are mandated to have a business tax registration certificate which is termed as a sellers’ permit or a sales tax permit as the case may be. Through this permit, businesses can get sales taxes paid by its customers which they are supposed to remit state revenues directly.
Gather Required Information
To create a smooth application process, be sure to have everything you need at hand prior to beginning.
The information that you will provide mostly emphasizes the structure of your business that will include the business entity type, the employer identification number (EIN), the Social Security number (SSN), the business address, and the contact information.
Complete the Application
The California Department of Tax and Fee Administration (CDTFA) is the responsible unit in relation with applications for sellers’ permits. On the website you might choose an online application or the paper version of it may be sent by mail as well.
In a virtual world, an application is usually quicker and more labor-free; at the time of registration your business information should you entered correctly.
Make sure you cross-check all the details and that there is no missing information to prevent delayed processing of your application. Be ready to add supporting documents to make the acceptance process easier.
Final Thoughts
You may expect some confirmation from (CDTFA) saying that they received your application.
Often times the waiting period does vary, but you can normally anticipate receiving your permit in a matter of weeks. But, at this point, educate yourself about tax obligations of sales, for example; how to file tax returns and remit payments as well as when the tax returns should be filed.
Conclusion
Getting the seller’s permit in California is considered as a “must do” for those who intend to sell tangible goods.
Through interpretation of need, collection of required information, filling in the application correctly and doing post-application activities properly can ensure compliance with the state regulations and avoid possible financial penalties.