What You Need to Know about a California Resale Permit

A California resale permit is necessary when you have a business where you are purchasing products for resale. A resale permit will allow you to purchase items from wholesalers, without having to pay sales tax. Some retailers will still allow you to merchandise products without a permit, but you would be subjected to the sales tax in the state. If you are doing business in California, you intend to lease or sell personal property and will be making sales for a period that lasts longer than 30 days at one or more locations, you will need a resale permit.

How to Apply for a Resale Permit

There are a few different ways to get a California resale permit, which you can do in person, by mail, or online. If you want to apply in person, apply at one of the Board of Equalizations’ field offices. You can usually get the permit the same day you apply and there is help with the application if you need it. There are special information packets that have the right registration application for specific and different businesses available. In order to register by mail, you can call and a packet will be sent to you within 24 hours. You can also ask any questions you have about the permits. After you fill out the application, you will get your permit in about two weeks. However, if you have an incomplete application, it will slow down the process. You can also apply online at the Board of Equalization website. Information is also available on the rules for specific businesses and types of sales on the website.

Difference between a Seller’s Permit and a Resale Certificate

Even though these two terms can sometimes be used interchangeably, they do refer to different items. A seller’s permit is issued and allows a business to make sales in the state. Once you have a seller’s permit you can also get a resale certificate, which allows a business to buy items without paying tax to the seller. This is only for the items that you are going to sell as a business and not for stuff for your business, such as office supplies.

Obligations of Those with a Seller’s Permit

For those who have a seller’s permit, there are some certain obligations. You have to learn how to properly apply the sales tax for your business operations. You need to keep accurate records that document your purchases and sales. You will also need to file periodic sales and use tax returns with the Board of Equalization, and the BOE will figure out the payment cycle and tell you when you need to file. The records you keep will be important to determine the right tax liability under the tax law.