Getting Started with Home-Based Businesses

In California, all retail sales of tangible personal property are subject to sales or use tax unless the law provides a specific exemption or exclusion. Tangible personal property is an item (e.g., merchandise, goods, etc.) that can be seen, weighed, measured, felt or touched.

If you sell tangible merchandise and make three or more sales in a 12-month period, you generally are required to hold a seller's permit. This is true whether the merchandise was sold through a storefront or out of a home. When you operate a home-based business and sell merchandise from your home, you must register with the California Department of Tax and Fee Administration (CDTFA) for a seller's permit and file and pay sales tax on your taxable sales unless a specific exclusion applies. When there is no merchandise transferred in a transaction, there is no “sale” under California Sales and Use Tax Law. Therefore, if your business provides only services rather than selling tangible goods, sales and use taxes would not apply to your transactions (See Service Businesses on the Industry Topics tab).

The requirements under the sales and use tax law for running a home-based business are generally the same as running a storefront business.

New Information

Beginning October 1, 2019, pursuant to the Marketplace Facilitator Act, if you make sales through a marketplace that is owned or operated by a marketplace facilitator and all your sales of tangible merchandise will be facilitated by a marketplace facilitator that is registered as a seller or retailer with CDTFA, you are not required to be registered with CDTFA for a seller's permit or Certificate of Registration — Use Tax. However, if you make any sales of tangible merchandise other than those facilitated by a marketplace facilitator (for example, through your own website or at craft fairs) you may be required to register as a seller or retailer with CDTFA.

For more information, please see our Tax Guide for Marketplace Facilitator Act webpage.

Registration

Register with us online for your seller's permit. In addition to holding a seller's permit, you may also need to register for another license or permit with CDTFA. For more information about the permits or licenses CDTFA administers, please see our Online Services Registrations page.

Note: Additional registration information is available for online retailers on the Online Retailers: Registration and Local Tax tab of our Local and District Tax Guide for Retailers.

Filing and Payment

Filing Dates for Sales & Use Tax Returns — Find your filing due dates.
File a Tax Return Online — File your return quickly and easily online.
Online Payment Options — Make online payments toward your current and past due tax liabilities.

Keeping Your Business Information Current

CDTFA-345-WEB, Notice of Business Change — To ensure we can provide you with the most helpful information about your account, please inform us of any changes made to your home-based business. You may also contact our Customer Service Center at 1-800-400-7115 (TTY:711), or the nearest local office to make changes to your account information.

Educational Consultations

As part of our commitment to helping you understand your sales and use tax obligations, we have established the Taxpayer Educational Consultation Program. This free program provides eligible businesses with education and assistance and helps them prepare for their sales and use tax reporting requirements.

For more information, please see our Taxpayer Events and Education webpage.

Get it in Writing

If you have specific sales and use tax questions regarding your home-based business, we recommend that you request answers from us in writing. This will enable us to give you the best advice and will protect you from owing tax, penalties, and interest in case you are given erroneous information.

For details, please see Form CDTFA-8, Get It In Writing.