Introduction to California Resale Numbers
In California, businesses that purchase items for resale must obtain a resale number to avoid paying sales tax on those items. The resale number is issued by the California Board of Equalization (BOE) and is required for all businesses that sell tangible personal property.
To get a resale number in California, businesses must submit an application to the BOE, providing required documentation and information about their business. The application process can be completed online, and the BOE typically processes applications within a few days.
Eligibility Requirements for a Resale Number
To be eligible for a resale number in California, businesses must meet certain requirements. They must be engaged in the business of selling tangible personal property, and they must have a valid seller's permit. Businesses must also provide a valid federal tax ID number and a California secretary of state filing number.
Additionally, businesses must certify that they will use the resale number only for purchasing items for resale, and that they will not use it for personal purchases or other non-business purposes. The BOE may request additional documentation or information to verify a business's eligibility.
The Online Application Process
The online application process for a California resale number is straightforward and can be completed in a few steps. Businesses must first register for an account on the BOE's website, and then submit their application and supporting documentation.
The application will ask for business information, such as the business name and address, as well as the owner's name and contact information. Businesses will also need to provide their seller's permit number and federal tax ID number, and certify that they meet the eligibility requirements.
Using Your Resale Number
Once a business has obtained a resale number, they can use it to purchase items for resale without paying sales tax. The resale number must be provided to the seller at the time of purchase, and the seller must verify the number with the BOE.
Businesses must keep accurate records of their purchases and sales, including the resale number used for each transaction. The BOE may audit businesses to ensure compliance with resale number requirements, and businesses that fail to comply may be subject to penalties and fines.
Maintaining and Renewing Your Resale Number
Resale numbers in California must be renewed periodically to ensure that businesses continue to meet the eligibility requirements. The BOE will send renewal notices to businesses before their resale number expires, and businesses must submit a renewal application and pay any required fees.
Businesses must also notify the BOE of any changes to their business information, such as a change of address or ownership. Failure to maintain a valid resale number can result in penalties and fines, and may affect a business's ability to purchase items for resale without paying sales tax.
Frequently Asked Questions
What is a resale number in California?
A resale number is a permit issued by the California Board of Equalization that allows businesses to purchase items for resale without paying sales tax.
How do I get a resale number in California?
You can apply for a resale number online through the BOE's website, or by submitting a paper application. You will need to provide required documentation and information about your business.
What is the difference between a resale number and a seller's permit?
A resale number is used to purchase items for resale without paying sales tax, while a seller's permit is required for all businesses that sell tangible personal property in California.
How long does it take to get a resale number in California?
The BOE typically processes applications within a few days, but it may take longer if additional documentation is required or if there are issues with the application.
Do I need to renew my resale number?
Yes, resale numbers in California must be renewed periodically to ensure that businesses continue to meet the eligibility requirements. The BOE will send renewal notices to businesses before their resale number expires.
What happens if I don't have a valid resale number?
Businesses that do not have a valid resale number may be required to pay sales tax on their purchases, and may be subject to penalties and fines. They may also be unable to purchase items for resale.