A California resale certificate lets eligible businesses buy goods for resale without paying sales tax at the time of purchase. Buyers provide the certificate to their suppliers, who keep it as documentation for the tax-exempt sale.For ecommerce and consumer packaged goods (CPG) businesses, using a resale certificate correctly can help manage inventory costs and sales tax compliance. However, the exemption applies only to qualifying purchases intended for resale.California does not issue resale certificates directly to businesses. Instead, buyers can complete Form CDTFA-230, General Resale Certificate, and provide it to their suppliers.This guide explains how to get, complete, and use a California resale certificate, which purchases qualify, and how businesses can avoid common mistakes.Understanding Resale Certificates in California
What is a California Resale Certificate?
In California, the California Department of Tax and Fee Administration (CDTFA) issues the California Resale Certificate that allows businesses to:
- Purchase goods without paying sales tax, provided the buyer plans to resell the goods to their customers in the normal course of their business.
- Make tax-exempt purchases of inventory and materials that will become part of the products they sell by presenting a valid resale certificate to their suppliers.
A resale certificate does not exempt every business purchase from sales tax. Goods purchased for business use, personal use, or consumption generally do not qualify.
For official guidance, see the CDTFA’s Publication 103: Sales for Resale.
How to Get a Resale Certificate in California: A Step-by-Step Guide
Businesses do not need to apply to the CDTFA for a separate resale certificate. They can download the official form and provide a completed copy to their suppliers. Follow these steps to prepare a California resale certificate:
1. Determine whether your business needs a seller’s permit
Businesses making taxable retail sales in California generally need a seller’s permit from the CDTFA. A resale certificate is different: it documents a qualifying purchase for resale.A purchaser does not always need a California seller’s permit to issue a valid resale certificate. If the purchaser is not required to hold one, the certificate must explain why.2. Download Form CDTFA-230
Get Form CDTFA-230 (General Resale Certificate) from the CDTFA’s forms and publications page. California also provides resale certificate forms for certain industries. Businesses should select the form that matches their transactions.
Need help? Read our blog: How to Get a Seller’s Permit in California.
3. Complete the required information
Fill out the certificate with the purchaser’s business information, the applicable seller’s permit number or an explanation, the property description, the resale statement, the date, and the signature.Make sure the document identifies the goods being purchased for resale. A general description may be sufficient for some purchases, while specific items may require a more detailed description.4. Give the certificate to your supplier
Provide the completed certificate directly to the supplier. You do not submit the certificate to the CDTFA as a separate application.The supplier retains the certificate as evidence supporting the sale for resale. If you buy regularly from the same supplier, you may be able to keep one blanket resale certificate on file for qualifying purchases.How to Use a Resale Certificate in California
To properly use your resale certificate in California for tax-exempt purchases, you must present a completed California General Resale Certificate (Form CDTFA-230) to your supplier at the time of purchase. This certificate documents that the items you’re buying are intended for resale in the regular course of business.
To be valid, your certificate must include all of the following information:
- Name and address of the purchaser
- California Seller’s Permit number (or reason why the purchaser doesn’t have one)
- Description of the property being purchased for resale
- A clear statement that the property is being purchased for resale
- Date of execution
- Signature of the purchaser or an authorized representative
California does not accept resale certificates issued by other states. If you are an out-of-state buyer wishing to make purchases for resale within California, you must register for a California Seller’s Permit and use a California resale certificate when purchasing from California vendors.
While California requires resale certificates to be accepted in good faith, this only applies to California-issued resale certificates. As a seller, if you’re given a resale certificate, ensure that:
- The buyer provides their valid California Seller’s Permit number
- The described goods match the buyer’s business type (e.g., a toy retailer buying electronics may raise red flags)
- You retain the certificate as proof of why sales tax was not collected
For more details, visit the California Department of Tax and Fee Administration (CDTFA) website or refer to Publication 103 – Sales for Resale.
What Can You Buy With a California Resale Certificate?
Tax treatment depends on the property’s intended use and the transaction circumstances.
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California Resale Certificate vs. Sales Tax Permit
A California Sales Tax Permit authorizes your business to collect and remit sales tax on taxable sales to customers. A California Resale Certificate (Form CDTFA-230), on the other hand, lets your business buy goods tax-free from suppliers as long as you intend to resell them. You must hold a valid and active sales tax permit before issuing a resale certificate.Read our guide on how to get a sales tax permit in California.Can You Use an Out-of-State Resale Certificate in California?
No, California generally does not accept out-of-state resale certificates if the transaction or delivery takes place within the state. It is one of the few states that strongly restricts acceptance of out-of-state resale certificates.This means California suppliers are highly likely to reject multi-jurisdiction resale certificates from the Multistate Tax Commission (MTC) or Streamlined Sales Tax Governing Board (SST).How To Verify and Keep Resale Certificates
California sellers also have responsibilities when accepting resale certificates. A certificate supports a nontaxable sale, but the seller should confirm the document and transaction meet the state’s requirements.Sellers should:- Review the purchaser’s business information and the description of the goods.
- Confirm that the stated resale purpose is consistent with the transaction.
- Check the seller’s permit number when applicable using the CDTFA’s Seller’s Permit Verification Tool
- Obtain and retain the certificate within the applicable timeframe.
Frequently Asked Questions
1. Does California issue resale certificates?+
2. Where do I submit a California resale certificate?+
3. Does a business need a seller’s permit to use a California resale certificate?+
4. Can I use a resale certificate to buy supplies for my business?+
5. Does a California resale certificate expire?+
6. Can I use one resale certificate for multiple purchases?+
How TaxHero Can Help
Using a resale certificate correctly is one part of managing sales tax for an ecommerce business. Businesses must also understand where they have sales tax nexus, register when required, collect the correct tax on taxable sales, and file returns on time.You don’t have to complicate managing sales tax compliance and resale certificates in California. TaxHero simplifies the process, from keeping your California Sales Tax Permit active to ensuring you use resale certificates correctly.
Save time. Avoid penalties. Stay compliant.
Book a demo to see how TaxHero can streamline your California resale certificate process today.
