Thursday, June 21, 2007

Out of State Sales Into California - Applying for Temporary Resale

Thought I'd jot down my findings real quick since the issue came up...

The company I work for has a potential sale coming up with a customer in California (we're in New York).  We'd like the vendor we are purchasing the equipment from to drop-ship into CA for us (to avoid having the equipment cross the country twice).  The vendor has nexus in CA and wants a resale certificate or must charge CA sales tax. 

I found on the CA sales tax website form BOE-400-SPA which is the Application for Sellers Permit.  This form allows you to apply for a permit as a temporary seller.  The way the form is worded, though, it is generally for vendors selling at a trade show or event.  Another concern about the form is that the instructions say that you may be required to put up a security deposit.

I decided to call the CA Out-of-State District office (916-227-6602) to ask a couple questions.  By the way, I found their number in Publication 77:  Out of State Sellers (worthwhile to read through).  After explaining the situation to her that this is a one time sale to an individual customer she said that I should fax in form BOE-400-SPA as a temporary vendor (fax #916-227-6641) and in the section titled 'Temporary Permit Event Information' simply enter the address of your customer (so that the county can get its share of tax collected).

On that note, you will be responsible for filing a CA sales tax return and you will have to collect CA sales tax from your customer unless they provide you with an exemption certificate. 

I was told that after you fax in the application, it will take 2-3 days for you to get the identification number to provide to your vendor on a resale certificate (also available on the CA website).  A bit of work for just one sale, so it would have to be worthwhile.

On my website I have links to all the states tax or department of revenue websites.  Find them here:  AccountingHelpDesk Sales Tax Sites. 

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