California sales tax nexus

Yes for the threshold test: marketplace sales count toward the $500,000, but the marketplace facilitator is generally responsible for collecting and remitting tax on those particular sales, so you can be over the threshold, required to register, and still have the facilitator collecting on the marketplace portion while you collect on your direct sales. It is a common source of confusion and it is worth mapping out properly.

California's sales tax base is tangible personal property, so pure services are generally outside it. The traps are bundling: if a service is sold together with tangible goods the whole charge can become taxable, and fabrication or assembly services performed on customer property, which are treated differently. If your invoices mix services and goods, that is worth reviewing.

No, and this catches people out. California has a separate economic nexus standard for income and franchise tax purposes with different thresholds, and public-law protection for sellers of tangible goods does not extend to services. Crossing the sales tax threshold frequently means an income tax filing question exists too. They should be looked at together.

On crossing the threshold, measured against the current or preceding calendar year, not at the end of the period. In practice, monitoring your California sales against the $500,000 line during the year is the way to avoid discovering the crossing months after the fact.

That is extremely common and it is the single largest source of assessments we see. Collecting the statewide rate but misallocating or omitting district tax produces a liability even when the total collected looks about right. See our district tax page, it is worth reviewing before an auditor does.

Book a scoping call using the form on this page, or call us. We will ask what you need, who is asking you for it, and what condition your records are in, then tell you what the engagement involves and what it will cost before anything begins.