Sales tax for handmade sellers and marketplaces

Marketplace facilitator laws move sales tax onto the marketplace

For orders placed through a marketplace that is registered as a facilitator, the marketplace is treated as the seller for sales tax. It collects and remits the tax, not you.

California is one of many states with a marketplace facilitator rule. Its version took effect on October 1, 2019, and it is a useful model because the tax agency explains it in plain terms. Once a registered facilitator handles the sale, the facilitator is the retailer for that sale.

For a maker who sells only through a large marketplace, that removes most of the sales tax work. Confirm in your marketplace's seller help pages that it collects and remits tax in your state on your orders, rather than assuming.

October 1, 2019Beginning October 1, 2019, California treats a marketplace facilitator as the seller and retailer for each sale facilitated through its marketplace. — California Department of Tax and Fee Administration, retrieved 2026-09-27

A marketplace-only seller may not need a California seller's permit

If every retail sale you make in California goes through a registered marketplace facilitator, you are not required to hold a California seller's permit.

This surprises sellers who have read generic advice telling them to get a permit before their first sale. For a marketplace-only shop in California, the tax agency says otherwise. The facilitator holds the registration and handles the tax on those sales.

The exemption is narrow, though. It covers only sales the facilitator actually handles. The moment you sell any other way, the picture changes, which is what the next section is about.

CDTFA says you need no seller's permit or use tax registration if all of your retail sales of merchandise will be facilitated by a marketplace facilitator. — California Department of Tax and Fee Administration, retrieved 2026-09-27

Craft fairs, markets and your own website put sales tax back on you

Sales you make outside a registered marketplace, such as at a craft fair, through your own website, or to a customer in person, are your responsibility to register for, collect and report.

This is where most handmade sellers end up needing a permit after all. A booth at a holiday market is a retail sale by you. So is an order through a site you host, or a commission paid by card at your door.

California draws a line for event sellers. Selling at one location for less than 90 days calls for a temporary seller's permit. Selling at three or more events in a 12-month period means registering for a regular seller's permit instead.

Once you hold a permit because of outside sales, CDTFA asks you to report your total sales on your return, including the sales made through a marketplace. The registration steps are in the registration guide.

A marketplace seller that makes any California sales not facilitated by a registered marketplace facilitator may have a registration requirement. — California Department of Tax and Fee Administration, retrieved 2026-09-27

90 daysCDTFA considers anyone selling at a location for less than 90 days a temporary seller, required to hold a temporary seller's permit. — California Department of Tax and Fee Administration, retrieved 2026-09-27

3 events in 12 monthsCDTFA says that participating in three or more swap meets, flea markets and special events in a 12-month period requires an ongoing seller's permit. — California Department of Tax and Fee Administration, retrieved 2026-09-27

What a California seller's permit costs and what the rate is

A California seller's permit is free, though the state may ask for a security deposit. The base sales tax rate is 7.25 percent, and local district taxes add to it in most areas.

The security deposit is not a fee. It is held against unpaid tax in case a business closes owing money, and the amount is set when you apply. Many small sellers are never asked for one, but it is worth knowing before you apply.

The rate you charge depends on where the sale happens. At a craft fair, that means the rate at the event's location, which is often higher than 7.25 percent once district taxes are added. CDTFA has an address lookup for the exact figure. Put the rate for each event on a card at your booth.

$0CDTFA does not charge for a seller's permit but may require a security deposit to cover unpaid taxes if the business later closes. — California Department of Tax and Fee Administration, retrieved 2026-09-27

7.25%California's statewide base sales and use tax rate is 7.25 percent, and in most areas local district taxes increase the rate. — California Department of Tax and Fee Administration, retrieved 2026-09-27

Handmade goods are taxable like any other merchandise

Handmade does not mean tax-exempt. Candles, prints, jewelry and soap are tangible goods, and their retail sale is taxable unless a specific exemption applies to the item.

Some sellers assume that because they made the item themselves, it is somehow outside the sales tax. The tax follows the sale of tangible personal property, not how it was produced. CDTFA's guidance for home-based sellers notes that handmade items are generally taxable, and a seller who sells them at retail is expected to hold a permit.

A handful of items are treated differently, food above all. If you sell edible goods, check the specific rules before assuming either way.

CDTFA says anyone doing business in California who sells taxable tangible personal property at retail must hold a seller's permit and display it at their place of business. — California Department of Tax and Fee Administration, retrieved 2026-09-27

CDTFA says sellers at swap meets, flea markets and special events that make retail sales are generally required to obtain a seller's permit. — California Department of Tax and Fee Administration, retrieved 2026-09-27

Before your next market, check which sales are yours

List every channel you sell through and mark which ones a registered marketplace handles. Anything left over needs a permit, and a permit needs regular returns.

A seller's permit is not related to your entity. A sole proprietor gets one in their own name exactly as an LLC would, so needing one is not a reason to form an LLC. Read whether you need an LLC yet for the triggers that actually matter.

If your outside sales are growing, the setup guide shows where the permit sits in the full sequence, and the cost breakdown shows the permit alongside the shop's other recurring costs.

CDTFA says the seller's permit requirement applies to individuals, corporations, partnerships and LLCs alike, whether wholesalers or retailers. — California Department of Tax and Fee Administration, retrieved 2026-09-27

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