Starting a small business offers individuals an exciting opportunity to supplement their income or quit their day jobs to pursue financial freedom. Staying on the right side of the law is important, especially in a regulation-happy state like California. Small entrepreneurs need to be aware of the Golden State’s rules regarding seller’s permits.
In California, if you make three or more sales in a 12-month period, you are usually required to obtain a California seller’s permit. This applies even to individuals who make sales via Craigslist, eBay, or other online sales sites or auction houses.
Garage sales are a small exemption to this law. In general, people who hold garage sales and sell used items are not required to obtain a seller’s permit unless they have more than two garage sales within 12 months.
Not obtaining a seller’s permit puts you at risk of fines and penalties. If you’re caught operating without a seller’s permit, authorities will contact you and ask you to obtain one. If you fail to do so, you can be written a criminal citation. This requires you to face a judge, who can fine you up to $5,000 and/or sentence you to up to a year in jail.
The district attorney’s office could also seek additional penalties under the Unfair Business Practices Act. In addition to these penalties, sellers who fail to get permits can also face taxes, interests, and other penalties assessed by the state Board of Equalization.
California is vigilant about enforcement of its laws regarding seller’s permits, so scofflaws who avoid getting permits run a good risk of getting caught.
Online Selling
From 2010 to 2015, total U.S. retail e-commerce sales jumped from $1.67.3 billion to more than $350 billion, according to Entrepreneur magazine. E-commerce currently accounts for more than 10 percent of total U.S. sales and that share continues to grow. The vast majority of Gen-Xers and Millennials do a considerable chunk of their shopping online, and seniors are also turning to e-commerce at growing rates.
A significant part of the U.S. e-commerce market is made up of small sellers. Since the advent of e-commerce, many small sellers have been making a steady side income selling merchandise they’ve acquired or products they’ve manufactured themselves online.
Governments have been slow to tax and regulate e-commerce, but they’re catching up. A growing number of states are requiring online retailers to collect sales taxes, and many states also require online sellers to obtain permits.
Regulatory oversight and taxes show that e-commerce has come of age and is now an integral part of our society and economy.
Dealing with the state bureaucracy to get a CA seller’s permit can be a major inconvenience, but Sellerpermits.com can help. FastFilings.com handles all of the paperwork and interactions involved with obtaining a California seller’s permit, leaving you free to focus on growing your business. With Sellerpermits.com, you can duck the hassle of waiting in line at government offices and filling out lengthy forms while staying on the right side of California law.