How Much Is a Seller’s Permit in California?

A seller’s permit in California costs nothing. The California Department of Tax and Fee Administration (CDTFA) charges no application fee and no renewal fee, and the permit does not expire as long as you remain in business.¹ The only upfront money you might have to put up is a security deposit, which the CDTFA requires from some applicants based on expected sales. Everything else that feels like a “cost” comes after: the sales tax you collect and remit, the penalties for filing late, and the record-keeping that comes with holding the permit.

When the CDTFA Asks for a Security Deposit

The security deposit protects the state against unpaid sales tax if your business later closes with an outstanding balance.¹ The amount is set when you apply, based on factors like your type of business and your projected taxable sales. Not every applicant is asked for one. Many small-volume sellers are approved without any deposit at all.

Do You Even Need One

You need a California seller’s permit if you’re engaged in business in the state and intend to sell or lease tangible personal property that would ordinarily be subject to sales tax. That applies to retail and wholesale sellers, and to sole proprietors, partnerships, LLCs, and corporations alike.¹ Tangible personal property means physical things you can touch, weigh, or measure: clothing, furniture, electronics, handmade crafts.

Short-Term and Pop-Up Sellers

Selling at a location for fewer than 90 days, such as swap meets, holiday pop-ups, or fireworks stands, calls for a temporary seller’s permit rather than a standard one. Temporary permits are also free. You apply through the CDTFA’s online registration system and provide start and end dates for each temporary location.²

Digital-Only Sellers

Purely digital goods transmitted over the internet, such as ebooks, downloaded software, mobile apps, and digital images, are generally not subject to California sales tax. If your entire business is digital downloads, you likely don’t need a seller’s permit. Include a physical copy of the product, though (say, a flash drive with backup software), and the entire sale becomes taxable.³

More Than One Location

California requires a separate permit for each place of business. Two retail stores at different addresses means two permits. The CDTFA does offer a consolidated permit option for businesses with many locations, so mention all your locations when you apply and the CDTFA can issue the right type.⁴

Selling Into California From Elsewhere

You don’t have to be physically in California to need a permit. Out-of-state retailers whose sales into California exceed $500,000 in the current or previous calendar year must register with the CDTFA and collect California use tax.⁵ That threshold counts all sales into the state: taxable, exempt, wholesale, and sales made through a marketplace facilitator. Sellers on Amazon, Etsy, and similar platforms who cross that line must register.

Applying for the Permit

You can apply online through the CDTFA’s registration portal or in person at any CDTFA field office. Online is faster; most permits are issued within one business day. In-person or mailed applications can take up to about two weeks.⁶

Gather these before you start:

Personal ID: Social Security number (corporate officers excluded), date of birth, and a driver’s license, state ID, passport, or military ID
Business details: legal name, physical and mailing addresses, entity type, and start date
Financial information: bank names and locations, expected average monthly sales and the taxable portion of those sales, and your suppliers’ names and addresses
Professional contacts: name and address of your bookkeeper or accountant, plus personal references

Buying an existing business adds one more item: the prior owner’s permit information.⁷

Once issued, the permit stays valid as long as you’re actively selling. There is no renewal cycle and no periodic fee. California law does require that the permit be conspicuously displayed at the business location it was issued for, and it is not transferable to another person or another address.⁸

What Holding the Permit Actually Costs You

The permit is free. The compliance is not.

Collecting Sales Tax

You must collect California sales tax on every taxable sale of tangible personal property. The statewide base rate is 7.25%. Most areas add local district taxes ranging from 0.10% to 2.00%, so the rate your customers actually pay depends on where the sale takes place.⁹

Filing Returns

You file sales and use tax returns with the CDTFA on a schedule they assign, either monthly, quarterly, or annually, based on your sales volume. Returns are due by the last day of the month following each reporting period. A June return is due July 31.¹⁰ If a due date falls on a weekend or state holiday, the deadline moves to the next business day.

Zero sales during a period still means filing a return. Skipping a period because you had nothing to report is treated the same as not filing at all.¹¹

Keeping Records

Hold on to all business records (invoices, receipts, cash register tapes, bank statements, purchase orders) for at least four years. The CDTFA can request them at any point in that window. Don’t destroy records early without written CDTFA authorization.¹²

What It Costs to Slip Up

Missing a filing deadline or paying late triggers a 10% penalty on the tax due for that period. Filing late and paying late together is still capped at 10%; the two penalties don’t stack to 20%.¹³

Interest also accrues for every month or partial month the payment is late. The CDTFA publishes the current interest rate factor, which has recently been around 10% annually (roughly 0.83% per month).¹³ Interest adds up quickly on larger balances, so if you can’t pay in full, filing on time at least avoids the filing penalty.

Selling without a valid permit, or continuing to sell after a permit has been suspended or revoked, is a misdemeanor under California law. A corporate officer of a company selling without a permit can be personally charged.¹⁴ On top of the criminal exposure, the CDTFA can assess all standard penalties and interest on the tax you should have been collecting. You’d owe the full amount, with no realistic way to go back and charge past customers.

Closing Out

When you stop doing business, notify the CDTFA to close your account through online services or by filing a closeout form (CDTFA-65). You’ll be asked when you stopped operating, how you handled remaining inventory and equipment, and the selling price if you sold the business.¹⁵

You must file a final sales and use tax return covering all sales up to the closeout date, including any sales of fixtures, equipment, or retained inventory. Kept inventory for personal use? You owe tax on those items. Annual filers face a tighter deadline than usual: the final return is due by the quarterly deadline for the quarter in which you closed, rather than the regular annual due date.¹⁵ The four-year record-keeping requirement survives the closure, so keep the files even after the business is gone.

1
California Department of Tax and Fee Administration. California Department of Tax and Fee Administration – FAQ Seller’s Permit
2
California Department of Tax and Fee Administration. Temporary Sellers
3
California Department of Tax and Fee Administration. Internet Sales (Publication 109) Nontaxable Sales
4
California Department of Tax and Fee Administration. Your California Seller’s Permit (Publication 73)
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California Department of Tax and Fee Administration. Use Tax Collection Requirements Based on Sales into California
6
California Department of Tax and Fee Administration. Applying for a Seller’s Permit (Publication 107)
7
Taxes.ca.gov. Get a Seller’s Permit
8
California Legislative Information. California Revenue and Taxation Code RTC 6067
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California Department of Tax and Fee Administration. California City and County Sales and Use Tax Rate Information
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California Department of Tax and Fee Administration. Filing Dates for Sales and Use Tax Returns
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California Department of Tax and Fee Administration. Instructions for Completing CDTFA-401-A State, Local, and District Sales and Use Tax Return
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California Department of Tax and Fee Administration. Sales and Use Tax Records – Retaining Records
13
California Department of Tax and Fee Administration. Interest, Penalties, and Collection Cost Recovery Fee (Publication 75)
14
California Legislative Information. California Revenue and Taxation Code RTC 6071
15
California Department of Tax and Fee Administration. Closing Out Your Account (Publication 74)