Get your tax IDs in California

An EIN, if you need one, takes minutes online. California adds a seller’s permit if you sell goods and an employer account once you hire.

What’s different in California

• Each tax has its own agency: the California Department of Tax and Fee Administration (CDTFA) for sales tax, the Employment Development Department (EDD) for payroll, and the Franchise Tax Board (FTB) for income and franchise tax.
• A seller’s permit is free, and it comes before your first sale. Selling taxable goods without one violates the law. Wholesalers need one too.
• Marketplace-only sellers generally don’t need one, if the marketplace is registered to collect California tax for them. Sales from your own site or in person can change that.

Do this

1. Get an EIN from the IRS if you need one. The IRS requires one if you have employees and for partnerships, corporations, nonprofits and most LLCs. A sole proprietor, or a one-owner LLC with no employees, may not need one, but can still get one for banking. It’s free and, if approved, issued immediately online. Form your LLC or corporation first, or the application may be delayed. Don’t pay a website to apply for you.
2. Decide whether you sell goods. You need a seller’s permit if you sell or lease physical products in California that would normally be taxable, even part time. Services alone usually don’t.
3. Register with CDTFA online. Selling at one location for 90 days or less, like a fair or pop-up? Ask for a temporary seller’s permit.
4. Look up your tax rate. The state rate is 7.25%, and district taxes of 0.10% to 2.00% each can stack on top. CDTFA’s rates page gives the rate by city and county.
5. Register with EDD when you hire. Once you pay more than $100 in wages in a calendar quarter, you have 15 days to register as an employer. Have your EIN ready.
6. Know where income tax goes: the Franchise Tax Board (FTB), when you file. A sole proprietor uses the personal return (Form 540). An LLC with the default tax treatment files Form 568, and a partnership files Form 565; Stay compliant has the dates.

What you get back

• EIN: a nine-digit federal tax ID, shown on screen when approved. Print the confirmation letter.
• Seller’s permit: from CDTFA. It comes with sales and use tax returns and records of your sales and purchases.
• EDD account: an eight-digit employer payroll tax account number (SEIN).

Not selling goods or hiring yet? You may need nothing more for now.