MUST YOU COLLECT CALIFORNIA SALES TAX?

 

The simple answer is “Yes”.  However it is a bit more complicated than that.

 

I having been selling jewelry and other vintage items through a company called Etsy.  They post my items and provide information and help for managing my sales.  When I began most of my sales were outside of California.  But when my first California item was sold no tax was collected.  I attempted to find out how to collect the tax but was told to contact my tax advisor.  I have no tax advisor.  I discovered that other Etsy members in California were also not collecting taxes.  This is unlawful and I did not want to be charged with a fee and/or a penalty at some point in time.  So I did my research.

 

As a small business owner in California you are required to collect sales tax for every sale you deliver in California and send it to the State Board of Equalization at the end of the year. You are not required to collect  sales tax for any other State in the United States.

 

California State has a standard sales tax rate of 7.25%  Many of California’s cities, counties, towns, and communities have special taxing jurisdictions (districts), which impose a transactions (sales) and use tax in addition to the standard statewide rate.  Rates for these districts range from 0.10% to 1.00% per district.

Part 1 of 2.  See the next posting in this series Friday on how to collect the  tax.

 

My information came from the California State Board of Equalization, www.boe.ca.gov.   I found Publication 101, “Sales Delivered Outside California”, but there is a lot more useful information on that site.

© Marylou Denyer http://mludenyer.com