- May 11, 2026
- Posted by: Support
- Category: Resale Certificate
Key Takeaways
- California resale certificates are administered by the California Department of Tax and Fee Administration (CDTFA), not the IRS.
- Most California wholesalers and resellers need a seller’s permit before issuing or accepting a resale certificate.
- California has a major drop-shipping rule: if the retailer is not registered in California, the drop shipper may owe tax based on the retail selling price or a marked-up wholesale price.
- The common California resale certificate form is CDTFA-230, also known historically as BOE-230.
California resale certificate rules are especially important for wholesalers, online sellers, and drop shippers because the state treats resale documentation and seller’s permit registration as separate but connected requirements. The California Department of Tax and Fee Administration, commonly called the CDTFA, manages seller’s permits, sales tax accounts, and resale certificate compliance through CDTFA Online Services.
Do Drop Shippers Need a California Resale Certificate?
Yes, California drop shippers commonly need resale documentation when buying inventory for resale, and they may also need to collect or report California sales tax depending on the structure of the transaction. A resale certificate allows a buyer to purchase taxable goods without paying sales tax at the time of purchase when the goods are being bought for resale.
California’s drop-shipping rules are more specific than many states. If a California drop shipper ships merchandise to a California customer on behalf of an out-of-state retailer that does not hold a California seller’s permit, the drop shipper may be treated as the retailer for California sales tax purposes. In that case, the taxable measure is generally the retail selling price if known. If the retail selling price is not known, California may require tax to be measured by the wholesale price plus a 10% markup.
What This Means for California Drop-Shipping Transactions
- California supplier sells to California-permitted retailer: The supplier may accept a valid California resale certificate and treat the sale as a sale for resale.
- California supplier ships for an out-of-state retailer without a California permit: The supplier may have California tax obligations as a drop shipper.
- Retail price unknown: California’s 10% markup rule may apply to the wholesale price for tax measurement.
- Improper or missing certificate: The California seller can be held liable for sales tax if the transaction is not properly documented.
Ready to register before issuing resale documents? Apply online now.
Can a Wholesaler Accept a California Resale Certificate Without Charging Sales Tax?
A California wholesaler may accept a valid resale certificate instead of charging sales tax when the buyer is purchasing tangible personal property for resale in the regular course of business. The certificate must be taken in good faith and must contain the information California requires, including the buyer’s seller’s permit number when applicable.
The standard California form is CDTFA-230, General Resale Certificate. Many businesses still refer to the older name, BOE-230, because the State Board of Equalization formerly handled many sales tax functions before CDTFA took over administration.
Required Information on a California Resale Certificate
A valid California resale certificate generally includes:
- The purchaser’s name and address
- The purchaser’s California seller’s permit number, if the purchaser is required to hold one
- A description of the property being purchased for resale
- A statement that the property is purchased for resale in the