A California resale certificate is a form you give a supplier when you buy goods you will resell. It tells the supplier not to charge you sales tax on that purchase, because the tax will be collected when you sell the goods to your customer. No agency issues the certificate. You fill it in yourself, and it must carry your seller's permit number. The CDTFA publishes a general form, CDTFA-230, but any document with the required parts counts.
California has no "resale license". Owners who ask for one mean one of two things. One is the seller's permit, the state's sales tax registration. The other is the resale certificate, the form on this page. A "wholesale license" in California is the same seller's permit. Wholesalers and retailers both hold it.
Seller's permit and resale certificate, side by side
| Seller's permit | Resale certificate | |
|---|---|---|
| What it is | the state's sales tax registration | a form that says a purchase is for resale |
| Who issues it | the CDTFA | nobody; you write it and give it to your supplier |
| Who it is for | the state, which gives you a permit number | each supplier you buy from for resale |
| What it costs | free | nothing; it is a form |
| How long it lasts | while you are in business and selling | one certificate per supplier can stay on file for repeat purchases |
| What it lets you do | charge sales tax and send it to the state | buy inventory without paying sales tax to the supplier |
The permit comes first. The CDTFA's rule for the certificate is that it comes from a person who is in the business of selling goods and who holds a California seller's permit. Without the permit number, the certificate has nothing to stand on.
What must be on it
The CDTFA says the certificate may be in any form, a note, a letter or a memorandum, as long as it contains six things:
- The name and address of the purchaser.
- The purchaser's seller's permit number.
- A description of the goods, either an itemized list or a general description of the kind of goods.
- A statement that the goods are purchased for resale, in those words. "Nontaxable" or "exempt" does not count.
- The date.
- The signature of the purchaser or someone authorized to sign for them.
Form CDTFA-230 has a line for each of these. If you buy from the same supplier again and again, one certificate can stay on file with that supplier. Your later purchase orders then mark which items are for resale; the CDTFA treats anything not marked as a retail sale to you, with tax.
When you may use it, and when not
The CDTFA's Publication 103 lists the uses:
- Finished goods you will resell.
- Materials that will become a physical part of an item you hold for sale.
- Items bought only for demonstration or display while held for sale.
And the uses that are not allowed:
- Goods you will use rather than sell, such as tools, equipment and office supplies.
- Goods you will use in the business before you sell them.
- Anything for personal use.
- Anything held as an investment.
If you are not sure an item is for resale, the CDTFA's advice is to pay the tax to the supplier. If you later sell the item before using it, you take a deduction on the return where you report that sale, under cost of tax-paid purchases resold prior to use.
What misuse costs
The form itself carries the warning. Suppose a person gives a resale certificate for goods they know will be used, not resold, to avoid the tax. That person owes the tax that would have been due, plus a penalty of 10 percent of the tax or $500, whichever is more, for each purchase. Giving a certificate to evade the tax is also a misdemeanor under the regulation. An item bought under a certificate and then used, say a sample you keep, owes use tax at that point.
If you are the seller being handed one
A supplier who accepts a valid certificate in good faith, and in time, owes no tax on that sale. In time means before you bill, within your normal billing cycle, or before delivery. Look at the nature of the buyer's business: a certificate from a service station does not cover a sofa. If the buyer insists, ask for a certificate that names the specific goods as purchased for resale in the regular course of business. Keep every certificate you accept. You can check a buyer's permit number on the CDTFA's verification page.
Why this one is easy to miss
A supplier asks a new owner for their "resale license" or "resale number", and the owner has nothing by that name. The state calls the registration a seller's permit, and the certificate is a form nobody mails you. So the owner either pays sales tax on inventory and never recovers it, or signs a certificate for things that were not for resale, which is the costly direction. The seller's permit is the registration; the certificate is the form you give out; the sales tax is still collected, once, at your sale.
The seller's permit is one item on the small business compliance list. If you are not sure whether your permit and your city's license are the same thing, this page sets them side by side.
Where Khanna's comes in
If you want help reviewing your small business compliance, email us at daksh@khannasllc.com with your business and your city.
Common questions
Is there a resale license in California? No. The registration is the seller's permit, free from the CDTFA. The resale certificate is a form you fill in yourself. Suppliers use "resale license" and "resale number" for the permit number.
Do I need a seller's permit before I can use a resale certificate? Yes. The certificate must carry your permit number. Some businesses are not required to hold a permit, because they sell only goods that are not taxed at retail or make no sales in California. Those businesses must write on the certificate why no permit is required.
Can I use it for supplies, packaging or equipment? Not for things you use. The CDTFA's list covers goods you resell, materials that become a physical part of what you sell, and items held only for display while for sale. Tools, equipment and supplies you use are taxable purchases.
Where do I get the form? CDTFA-230, the General Resale Certificate, on the CDTFA's site. Many suppliers hand you their own version; any document with the six required parts works.
A customer gave me a resale certificate. How do I check it? Confirm the six parts are present, that the goods fit the buyer's business, and that the permit number is current on the CDTFA's verification page. Keep the certificate with your records.
General information for California sellers as of November 2026. Khanna's is not a law firm or an accounting firm, and this is not legal or tax advice. The main rules above link to the CDTFA regulation, publications and form that state them. For your own situation, check with the CDTFA, a lawyer or a CPA.