Looking to start a business in California? You are required to get a use tax account or a wholesale license CA depending on your turnover amount and your wholesale operation. The forms and regulations regarding these requirements are available through the California Board of Equalization.
Obtaining a seller’s permit
If you are handling wholesale goods that are taxable at the retail level, you will need to apply for a California seller’s permit. This regulation holds for partnerships, corporations, sole proprietors and limited liability companies. There is no fee charged by the state for a seller’s permit, but the Board of Equalization may need a deposit for due and payable taxes. Also, it is vital to note that you must have a valid permit for each place of business unless the regulating body approves you for a consolidated permit. A consolidated permit is a seller’s permit that covers multiple business operations within the state.
Understanding Use Tax Accounts
The state of California requires a use tax account if your enterprise collects a minimum of $100,000 in receipts from its registered operations. A use tax account is also required if you are not registered for direct payment of taxes by the state, or when you are not required to hold a seller’s permit. In essence, the tax applies if you are not subject to sales tax. As such, the state will charge use tax on the goods you deal in. Use tax also arises when an out of state seller, not required to charge you sales tax by home state or when dealing in goods purchased online for which no sales tax was charged.
The county or city where you set up your business will require a business license, which is different from the state, issued seller permits. Also, you will need to register the business with the Franchise Tax Board, the state’s income tax agency. To ease through this licensing maze, start with the Governor’s Office of Business and Economic Development site before handling the other procedures.
The Board of Equalization provides online registration for the seller’s permit and the use tax account. The registration system requires that you precisely identify your business by accurate descriptions such as; “employing 10 or more people”, or “operating in California.” After selecting the appropriate descriptions, the system directs you to different pages where you can request appropriate licenses and permits. Some items such as alcohol, tobacco products, vehicles, electronics, construction equipment, lumber, and fuel require additional licenses.
If you prefer a face-to-face registration, you can visit the Board of Equalization offices spread across the state. To obtain the necessary certificates, or open an account, you must avail your social security number, state ID number, date of incorporation, and the name of your bank, business address or your email address. The BOE will also require information about your suppliers and average monthly sales.
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