California Nexus Requirements
California's economic nexus threshold is $500,000. Learn about all nexus types, registration requirements, and compliance steps.
Economic Nexus Threshold
Economic nexus threshold is $500,000 in annual sales
Physical Presence Requirements
Physical presence includes property, employees, or inventory. This can include maintaining an office, warehouse, or inventory location; having employees or contractors working in the state; attending trade shows or conducting business meetings regularly; or storing property or equipment within state borders.
Employee Nexus in California
Must register for employer withholding and other employment taxes
Affiliate & Click-Through Nexus
Affiliate Nexus
AppliesAffiliate nexus applies to related entities
Click-Through Nexus
AppliesClick-through nexus provisions apply
Marketplace Facilitator
California requires marketplace facilitators (such as Amazon, Etsy, and similar platforms) to collect and remit sales tax on behalf of third-party sellers. If you sell exclusively through qualifying marketplaces, the marketplace handles your California sales tax collection obligations.
How to Register in California
Determine your nexus
Confirm you have economic or physical nexus based on the thresholds above.
Gather required information
You will need your EIN, business formation documents, and expected sales volume in California.
Register online
Complete the registration through California's official portal.
Begin collecting & remitting
Once registered, start collecting applicable taxes and file returns by the assigned schedule.
Frequently Asked Questions
What is the economic nexus threshold in California?
California's economic nexus threshold is $500,000 in annual sales. Once you exceed this threshold, you are required to register for sales tax collection and remittance in California.
What creates physical presence nexus in California?
Physical presence includes property, employees, or inventory. This can include having employees, offices, warehouses, inventory, or other tangible property in the state.
How do I register for sales tax in California?
You can register for California sales tax through the state's online portal. Visit the California Department of Revenue website to complete your registration. You will need your business information, EIN, and expected sales volume.
Do I need to register if I have employees in California?
Yes. Must register for employer withholding and other employment taxes. Having employees in California creates physical presence nexus and may trigger sales tax, income tax withholding, and unemployment insurance obligations.
Does California have marketplace facilitator laws?
Yes, California requires marketplace facilitators (such as Amazon, Etsy, and similar platforms) to collect and remit sales tax on behalf of third-party sellers. If you sell exclusively through marketplaces, the marketplace may handle your California sales tax obligations.
Does California have affiliate and click-through nexus?
Yes, California recognizes affiliate and click-through nexus. Affiliate nexus applies to related entities. Click-through nexus provisions apply.
What happens if I don't register for nexus in California?
Failing to register and collect applicable taxes in California can result in back taxes, penalties, and interest on uncollected amounts. California may also conduct audits that cover multiple prior years. It is recommended to register proactively once you determine you have nexus.
Explore Other States
Need help with California compliance?
Let us handle your California registration, ongoing filings, and multi-state compliance monitoring.
Get a Free Consultation
Tell us about your business and we'll get back to you within 24 hours to discuss how we can help.