California Resale Certificate Guide 2026: How to Get Yours

California is the largest state economy in the U.S. and the fifth-largest economy in the world. With over 40 million residents and hundreds of thousands of active retail and wholesale businesses, getting your California resale certificate right is critical. Whether you run a boutique in San Francisco, a warehouse in the Inland Empire, or an e-commerce business selling nationwide, this guide covers everything you need to know about purchasing inventory tax-free in California in 2026.

California Sales Tax Basics

California has one of the most complex sales tax structures in the country, and its rates are among the highest.

State Base Rate

The California state sales tax rate is 7.25%. This is a combined rate that includes:

• 6.00% state tax
• 0.25% county tax (mandatory statewide)
• 1.00% local jurisdiction tax (mandatory statewide)

This 7.25% floor applies everywhere in the state. No California address pays less than this.

District Taxes

On top of the 7.25% base, individual cities and special districts can add district taxes that push the combined rate up to 10.25% in some locations.

Use our sales tax lookup tool to find the exact rate for any California address.

What Is Taxable in California?

California taxes the sale of tangible personal property unless a specific exemption applies. Some key points:

• Most physical goods are taxable
• Groceries (unprepared food) are generally exempt
• Prescription medications are exempt
• Most services are not taxable, with exceptions like fabrication labor
• Digital products are generally not taxable in California (unlike many other states)
• Clothing is fully taxable (no clothing exemption like New York or Pennsylvania)

What Form Do You Need?

California uses Form CDTFA-230, the Resale Certificate, issued by the California Department of Tax and Fee Administration (CDTFA).

About the CDTFA-230

The CDTFA-230 is a single-page document that the buyer fills out and gives to the seller. It includes:

• Buyer's name, address, and signature
• Buyer's California seller's permit number
• Description of the property being purchased for resale
• A certification that the items will be resold in the regular course of business

Unlike some states, California does not pre-print or mail resale certificates to you. You download the blank form from the CDTFA website and fill it out yourself.

Where to Get the Form

You can download CDTFA-230 directly from the CDTFA website at no cost. The form is a fillable PDF.

Critical point: California does NOT accept the Multistate Tax Commission (MTC) Uniform Sales and Use Tax Resale Certificate or the Streamlined Sales Tax (SST) certificate. You must use the California-specific CDTFA-230.

Who Needs a California Resale Certificate?

Any business that buys tangible personal property for the purpose of reselling it needs a California resale certificate. This includes:

Retailers and e-commerce sellers buying inventory to sell to consumers, whether through a physical storefront, Amazon, Shopify, eBay, or any other channel.

Wholesalers and distributors purchasing goods from manufacturers or importers to resell to retailers or other businesses.

Manufacturers buying raw materials, components, or ingredients that become part of a finished product for sale.

Restaurants and food service businesses buying food ingredients that will be served to customers as prepared meals (though California's rules on food are complex).

Rental businesses purchasing items they will rent to customers, since rentals of tangible personal property are taxable in California.

Who Does NOT Qualify

• Consumers buying for personal use
• Businesses buying supplies, equipment, or fixtures for their own use
• Contractors buying materials for installation into real property (contractors are generally the end consumers in California)
• Anyone without a valid California seller's permit

How to Apply for a California Resale Certificate

Step 1: Get a California Seller's Permit

Before you can use a resale certificate, you must have a California seller's permit. This is non-negotiable. California requires every business making sales of tangible personal property to hold a seller's permit from the CDTFA.

To register for a seller's permit, you will need:

• Your Social Security Number (SSN) or Federal Employer Identification Number (FEIN/EIN)
• California Driver's License or state ID
• Business name and address
• Type of ownership (sole proprietor, LLC, corporation, partnership)
• Description of products you will sell
• Estimated monthly sales
• Information about your suppliers

Registration is free. You can register online through the CDTFA's online registration portal.

Processing time: Online applications are typically processed within a few days. You can begin using your permit number immediately after approval.

Step 2: Download and Complete CDTFA-230

Once you have your seller's permit number, download Form CDTFA-230 from the CDTFA website. Fill in all required fields:

• Your seller's permit number
• Your business name and address
• The name of the vendor you are buying from
• A general description of the products you are purchasing for resale
• Your signature and the date

Step 3: Provide the Certificate to Your Suppliers

Give the completed CDTFA-230 to each supplier you want to buy from tax-free. The supplier keeps the certificate on file. You do not need to fill out a new certificate for every transaction with the same supplier, as long as the certificate covers a general description of the goods.

Want expert help with the registration and application process? We handle everything from seller's permit to resale certificate.

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Multi-State Considerations

California's rules for out-of-state sellers and multi-state businesses are strict.

California Does Not Accept Out-of-State Certificates

This is one of the most important things to understand: California does not accept resale certificates from other states, the MTC Uniform Certificate, or the SST certificate. If you are an out-of-state business buying goods in California, you must either:

1. Obtain a California seller's permit and use the CDTFA-230, or
2. Pay California sales tax on your purchases

Out-of-State Sellers Shipping Into California

If you are located outside California but sell to California customers, you may have economic nexus in California. California's economic nexus threshold is $500,000 in sales to California customers in the prior or current calendar year.

If you exceed this threshold, you must register for a California seller's permit, collect California sales tax, and file returns with the CDTFA.

Buying From Out-of-State Vendors

If you buy inventory from a vendor outside California and have the goods shipped into California, you may owe California use tax unless you hold a valid resale certificate and the goods are genuinely for resale.

For a full breakdown of how multi-state resale certificates work, read our multi-state resale certificate guide.

Common Mistakes with California Resale Certificates

Mistake 1: Using an Out-of-State Certificate in California

This is the single most common error. Businesses with resale certificates from other states assume they can use them in California. They cannot. California requires its own CDTFA-230, backed by a valid California seller's permit.

Mistake 2: Buying Non-Resale Items Tax-Free

Using your resale certificate to purchase office supplies, equipment, furniture, or anything you will use in your business (rather than resell) is illegal. The CDTFA actively audits for this, and penalties include back taxes, interest, and fines of 10% to 40% of the unpaid tax.

Mistake 3: Not Having a Seller's Permit

A resale certificate without a valid seller's permit behind it is worthless. Some businesses fill out the CDTFA-230 with a fake or expired permit number. Sellers can verify permit numbers through the CDTFA's online lookup tool, and auditors will flag invalid numbers.

Mistake 4: Failing to Describe the Property

The CDTFA-230 requires a description of the tangible personal property being purchased for resale. Leaving this blank or writing something vague like "various goods" can invalidate the certificate during an audit.

California-Specific Rules You Should Know

Seller's Permit vs. Resale Certificate

In many states, the "resale certificate" is the primary document. In California, the seller's permit is the foundation. Your resale certificate is only valid because you hold a seller's permit. If your seller's permit is revoked, suspended, or expired, your resale certificates become invalid.

Partial Exemptions for Manufacturing

California offers a partial sales tax exemption for manufacturing and research equipment. Qualifying manufacturers and certain biotechnology companies can purchase equipment at a reduced rate (paying only the state portion, not the local district taxes). This is separate from the resale exemption but worth knowing if you are a manufacturer.

Timber and Agriculture

Timber harvesting equipment and certain agricultural products have special exemptions in California. If your business operates in these industries, consult the CDTFA's specific publications for your sector.

Drop Shipping

Drop shipping in California creates complex tax situations. If you are a retailer who has a third-party supplier ship directly to your California customer, the supplier may need to collect tax from you (the retailer) unless you provide a valid CDTFA-230. The rules depend on where each party is located. See our drop shipping resale certificate guide for details.

Security Deposits

The CDTFA may require a security deposit from new businesses applying for a seller's permit. This deposit is based on your estimated monthly tax liability and can range from a few hundred dollars to several thousand. The deposit is returned after you establish a good filing history (typically 3 years).

How Much Can You Save?

At California's average combined rate of roughly 8.5% to 9.5%, the savings from using a resale certificate are substantial.

Use our savings calculator to calculate your exact savings based on your location and purchase volume.

California Resale Certificate FAQs

Q: Does the California resale certificate expire? A: There is no expiration date printed on the CDTFA-230. However, the certificate is only valid as long as your seller's permit remains active. If your permit is revoked or you stop doing business, the certificate is no longer valid.

Q: Can I use my California resale certificate to buy items for personal use? A: Absolutely not. This is considered tax fraud. The CDTFA audits for personal-use purchases and imposes significant penalties.

Q: Do I need a separate certificate for each supplier? A: Yes. You fill out a separate CDTFA-230 for each supplier. The certificate stays on file with that supplier.

Q: What if my supplier refuses to accept my resale certificate? A: Suppliers are not legally required to accept a resale certificate. If they refuse, you must pay the tax. However, most suppliers will accept a properly completed CDTFA-230 with a verifiable seller's permit number.

Q: Can I use a resale certificate for items I sell on Amazon or eBay? A: Yes, as long as you hold a valid California seller's permit and the items are genuinely for resale. Your sales channel does not affect the validity of the exemption.

Get Started with Your California Resale Certificate

California's resale certificate process requires a seller's permit, the correct state-specific form, and careful compliance. Given the state's high tax rates and active enforcement, getting set up properly saves you thousands and protects you from audit risk.

• Expert guidance through the California seller's permit process
• Help completing the CDTFA-230 correctly
• Ongoing compliance support

Get Your Resale Certificate -->

For more details on California's requirements, visit our California state page.

California's high sales tax rates make a resale certificate one of the most valuable tools for any business buying inventory in the state. Get your seller's permit, use the CDTFA-230 correctly, and keep your documentation organized.

Related Articles

• What Is a Resale Certificate? - Understand the fundamentals of resale certificates before tackling California's specific requirements.
• Resale Certificate vs. Sales Tax Permit - In California, you need both. Learn the difference.
• Multi-State Resale Certificates - California does not accept multi-state certificates. Learn which states do.