Remote sellers must register with the California Department of Tax and Fee Administration (CDTFA) and collect tax once their sales of tangible goods delivered into California pass $500,000 in the current or previous calendar year. Marketplace sales count toward that total, and from January 1, 2027 California also taxes SaaS and prewritten software.
California at a glance
- Economic nexus threshold: $500,000
- Measured over: Preceding or current calendar year
- Notes: Sales of tangible personal property, including marketplace sales
Checked against state guidance in October 2026. Compare every state
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Check your California sales tax nexus
Enter your sales and number of orders into each state for the period that state measures (usually the current or previous calendar year). The checker compares them with each state’s economic nexus threshold.
Thresholds last reviewed September 2026. States define includable sales differently (gross, retail or taxable), some count marketplace sales and some do not, and a physical presence such as inventory or staff creates nexus on its own. Results are estimates for general information only, not legal, tax or financial advice. Confirm them with your own CPA, tax adviser or attorney before making decisions. Using this tool does not create a client relationship with Catching Numbers Inc.
Do Amazon, Etsy and other marketplace sales count toward the California threshold?
Yes. California adds your sales through marketplaces such as Amazon, Etsy and Walmart to your direct sales when testing the $500,000 threshold. The marketplace collects and pays the tax on the sales it handles, and you collect on your own website and wholesale-to-retail sales.
When do I have to register and start collecting?
As soon as you cross the threshold. California has no grace period: once your California sales pass $500,000 in the current or previous calendar year, register with CDTFA and collect on your next California sale. If you crossed it last year, you should already be collecting this year.
How do I register for California sales tax?
Register online with CDTFA. A remote seller with no place of business in California receives a Certificate of Registration – Use Tax rather than a seller’s permit; the same online application issues the right one based on your answers. There is no fee to register.
What rate do I charge California customers?
The statewide base rate is 7.25%. Many cities and counties add district taxes on top, and once you are over $500,000 you collect the district tax for every district you deliver into, based on the delivery address. Combined rates run above 10% in some cities, so use address-level rates in your checkout or tax software rather than a single number.
Is SaaS taxable in California?
Not in 2026. Software delivered electronically and SaaS have been outside California sales tax for decades. That changes on January 1, 2027: under SB 122, prewritten software and SaaS become taxable however they are delivered. Custom software, digital books, music, video and games are excluded, and CDTFA’s proposed rules also exclude infrastructure and platform services (IaaS and PaaS).
CDTFA’s regulations are still being finalized, and under the proposed rules tax applies to subscription periods that start in 2027 even if the contract was signed earlier. If you sell software to California customers, plan your billing and tax settings now.
Is shipping taxable in California?
Usually not, if you set it up correctly. A separately stated charge for shipping directly to the customer by common carrier or the US Postal Service is not taxable, up to your actual shipping cost. A “handling” charge on its own is taxable, and so is any markup above actual cost. Different rules apply if you deliver in your own vehicles.
Do I owe California income or franchise tax as a remote seller?
Possibly. California treats a company as doing business there once its California sales pass a bright-line amount ($757,070 for 2025, adjusted each year) or 25% of its total sales. Corporations and LLCs doing business in California also owe at least the $800 minimum franchise tax each year.
Sellers of physical goods may be protected from state income tax by a federal law, P.L. 86-272, if their only activity in the state is soliciting orders that ship from outside it. That protection does not cover SaaS, services or digital products. Check your position with our California income tax nexus guide.
What if I store inventory in California, including Amazon FBA?
Inventory stored in California, including in an Amazon FBA or other marketplace warehouse, gives you a physical presence there. Physical presence creates sales tax nexus on its own, whatever your sales total, so you would generally need to register even below the economic threshold.
Frequently asked questions
What is the California economic nexus threshold for 2026 and 2027?
More than $500,000 of sales of tangible personal property delivered into California in the current or previous calendar year. There is no transaction count test. No change has been announced for 2027 as of October 2026.
Do sales for resale count toward the California threshold?
Yes. The $500,000 test looks at your sales of goods delivered into California, including nontaxable sales such as sales for resale. A seller whose California sales are all wholesale to registered resellers may not need to register.
Do I need a California seller’s permit if I only sell online?
Remote sellers with no place of business in California register for a Certificate of Registration – Use Tax instead of a seller’s permit. It lets you collect and report California use tax on your sales.
Will my SaaS revenue be taxed in California in 2027?
Most likely, if it is prewritten software or SaaS sold to California customers. SB 122 makes it taxable from January 1, 2027, with exclusions for custom software, certain digital media and, under proposed rules, IaaS and PaaS.
Selling into California and other states?
We track your sales by state every month as part of your bookkeeping, so you see a threshold coming before you cross it, and your books show exactly what you collected and owe.
General information for remote sellers, checked against state guidance in October 2026. California rules change and depend on your facts, so confirm your situation with the state or a sales tax advisor before registering or filing. We don’t prepare sales or income tax returns.