In California, a seller’s permit is generally required for businesses that sell tangible personal property subject to sales tax. However, most service-based businesses do not need a seller’s permit if they only provide non-taxable services and do not sell physical goods. Exceptions exist for certain taxable services, such as fabrication, repair, and installation services, where a seller’s permit may be necessary to collect and remit sales tax.
Businesses that sell both services and tangible goods must obtain a seller’s permit, even if the goods are a minor part of their operations. Additionally, while service-only businesses might not need a seller’s permit, they may still be responsible for paying use tax on out-of-state purchases used in California. It’s important for business owners to understand their specific obligations to ensure compliance with California’s tax laws.
Failing to obtain a required seller’s permit can result in penalties and legal consequences. To avoid these risks, businesses should assess their activities carefully and obtain a seller’s permit if needed. The process to acquire a seller’s permit is straightforward and can be completed online through the California Department of Tax and Fee Administration (CDTFA).
Do I Need a Seller’s Permit If I Only Provide Services to a Client and Do Not Sell Physical Goods in California?
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