If you buy tangible goods that will end up in the hands of your customers, you may not have to pay sales tax to your suppliers with a resale certificate.
Tangible goods are any physical item you sell, from food to medical supplies. This does not include services, such as care giving or consulting.
If you determine that a seller's permit is necessary for your business, you may also be interested in a reseller's permit, or resale certificate. This certificate allows you to avoid paying sales tax when purchasing certain goods from your suppliers and is administered by the California Department of Tax and Fees Administration (CDTFA).
For example, a barber might use a resale certificate to buy shampoo that will be displayed on shelves and sold to customers for home use. However, the barber would not be able to use the certificate to buy the shampoo used to wash the customers' hair on-site.
You may use your resale certificate on purchases that will end up in your customers hands.
The CDTFA has general guidelines for business owners on appropriate uses of a resale certificate.
📝 Using Your California Resale Certificate
You will need to apply for reseller's permit for each of your suppliers that provide qualifying purchases. Fill out the CDFTA's resale certificate form, and present a copy of this certificate to your eligible suppliers. You will need to fill out the resale certificate form for each one of your suppliers.