California's LLC fee reaches your eBay business in a way most states' rules don't.

The Bottom Line for California eBay Sellers

California asks more of a reseller than almost any other state in this cluster, and forming an LLC actually adds one real obligation of its own, the state's flat annual LLC tax and gross-receipts fee, on top of, not instead of, everything eBay's marketplace collection already handles. That tradeoff is still usually worth it once your volume justifies liability protection, but California isn't a state where the LLC filing is the whole story.

California's tax and licensing agencies each answer their piece of this directly and in writing: the Franchise Tax Board confirms its 1099-K duty tracks the federal test, the Department of Tax and Fee Administration confirms a marketplace-only seller doesn't need its own seller's permit, and the same department confirms, less helpfully, that it doesn't accept another state's resale certificate as a substitute for a California one. Layer a California LLC over an eBay business crossing the state's income thresholds and the Franchise Tax Board adds its own annual tax and fee on top. None of these four answers depend on each other; a seller can clear the marketplace-only registration exemption cleanly while still owing the LLC's annual tax and fee, or hold a secondhand-dealer license for serialized inventory while owing nothing on the LLC-fee side because the entity hasn't crossed California's income thresholds yet. Treat each block as its own question rather than assuming one answer predicts the others.

If every one of your sales into California runs through eBay, you do not need your own California sales-tax registration — eBay is the one collecting and remitting. We could not confirm whether California counts marketplace-facilitated sales toward its remote-seller threshold. California uses the federal reporting threshold, so eBay issues a 1099-K once you pass $20,000 and 200 transactions.

eBay Collects California Sales Tax. What Is Still Yours?

If every one of your sales into California runs through eBay, you do not need your own California sales-tax registration — eBay is the one collecting and remitting.

If every dollar you make in California runs through eBay's marketplace collection, California's own regulation says plainly you don't need your own seller's permit; the marketplace facilitator's registration covers it. That answer flips the moment you make any California sale outside the marketplace, even one, because the regulation's relief is conditioned on marketplace-facilitated sales being the entirety of your in-state activity, not the majority of it.

Do Your eBay Sales Count Toward California's Nexus Test?

We could not confirm whether California counts marketplace-facilitated sales toward its remote-seller threshold.

California's own remote-seller publication states its dollar threshold in plain language, but it stops short of saying whether a sale facilitated by eBay counts toward that number the way a direct sale would. The publication describes marketplace facilitators becoming the retailer of record for the sales they facilitate, without stating what that means for the seller's own threshold calculation. Other states in this cluster resolve this explicitly, one direction or the other; California, on the evidence available, currently doesn't. Track your independent, off-marketplace California sales carefully, since those unambiguously count, and don't assume either answer on the marketplace side until the state states one.

California's 1099-K Threshold

California uses the federal reporting threshold, so eBay issues a 1099-K once you pass $20,000 and 200 transactions.

California's Franchise Tax Board states its 1099-K rule about as directly as a state can: the same federal test that triggers a form with the IRS triggers the state copy, with no separate California figure layered underneath it for the ordinary reseller. Reconcile the form's gross figure against your actual books before treating it as taxable income; the number on the form is a payment total, not a profit number, and the difference is usually significant once fees, returns and cost of goods are subtracted out.

Buying Inventory to Resell in California

California will not accept an out-of-state resale certificate, buying inventory tax-free here means holding a California permit of your own.

California's own resale certificate regulation calls for the purchaser's California seller's permit number, not an out-of-state permit/certificate number. If the purchaser is not required to hold a California seller's permit (e.g., because they make no sales in California), Regulation 1668 lets them substitute a written explanation of that fact on a California-format certificate in lieu of a permit number, but California does not simply honor another state's numbered resale certificate as such.

This is where California breaks from most of the country: its resale-certificate regulation calls for a California seller's permit number specifically, and doesn't treat another state's certificate as sufficient on its own. A seller who isn't required to hold a California permit at all can substitute a written explanation of that fact instead, but that's a narrower workaround than simply presenting an out-of-state number the way most states allow. California's statewide secondhand-dealer license is real, but its reach is much narrower than used goods generally; the statute is written around property that carries a serial number or personal inscription, plus pawned property and categories the Attorney General separately designates as commonly stolen. Ordinary used clothing, books, or unmarked collectibles generally fall outside it entirely; serialized electronics, tools, instruments or engraved jewelry are a different question, worth checking against the state's current published list before assuming either answer. Because the AG's list of significant stolen-goods classes is updated annually, a category that's outside the secondhand-dealer statute this year isn't guaranteed to stay that way, so a reseller working in categories anywhere near the line is better off checking the current list each year rather than relying on a one-time determination.

California has a statewide second-hand dealer licence, but it does not reach every reseller. Whether it applies to you depends on what you sell. California does impose the secondhand-dealer licensing duty by state statute, Bus. & Prof. Code § 21640: 'It is unlawful for any person to engage in the business of secondhand dealer, as defined in Section 21626, without being licensed as provided in this article.' The licence is issued locally (chief of police, sheriff, or police commission) with Department of Justice review, but the mandate is statewide. What matters far more for a typical eBay reseller is WHAT PROPERTY the article covers, and it is much narrower than 'used goods'. § 21627(a) defines the term for the whole article: 'As used in this article, "tangible personal property" means all secondhand tangible personal property that bears a serial number or personalized initials or inscription or that, at the time it is acquired by the secondhand dealer, bears evidence of having had a serial number or personalized initials or inscription.' § 21627(b) extends it only to property received in pledge by a pawnbroker, to serialised or inscribed property purchased by a secondhand dealer or pawnbroker, and to classes the Attorney General designates from DOJ crime data as a 'significant class of stolen goods' (defined in § 21627(e) as more than 10% of property reported stolen in the preceding year, published on the AG's website and updated annually). § 21627(c) excludes new goods bought from a manufacturer, distributor or wholesaler, and § 21627(d) excludes coins, monetised bullion and commercial-grade precious-metal ingots. Practical effect: someone reselling used clothing, books, unserialised collectibles or similar ordinary secondhand goods is likely outside this article altogether. Someone dealing in serialised or personally inscribed items (electronics, tools, cameras, instruments, engraved jewellery), in pawned property, or in a category on the Attorney General's current list is within it and needs the licence, which also brings § 21628's daily reporting to law enforcement. Check the AG's current list and the serial-number test against what you actually sell before assuming either answer, and confirm with your local police or sheriff, who issue the licence.

The California Tax eBay Does Not Handle

California levies LLC gross receipts fee (California LLC fee), which can still reach you even though eBay handles the sales tax: This reaches you only if you trade through an LLC (not a sole proprietorship, not a corporation) AND that LLC is 'doing business in California' under Rev. & Tax. Code § 23101. You are doing business if you are organized or commercially domiciled in California, or if your California sales, property or payroll cross the annual threshold. Get the threshold right: § 23101(b)(2) sets a STATUTORY FLOOR of $500,000, but § 23101(c) requires the Franchise Tax Board to index it for inflation every year, so $500,000 is not the number to apply. FTB publishes the operative figures, and the most recent published year is 2025: California sales exceeding $757,070 (or 25% of total sales), California real and tangible personal property exceeding $75,707 (or 25% of total property), or California payroll exceeding $75,707 (or 25% of total payroll). For 2024 the figures were $735,019 and $73,502. FTB had not published a 2026 figure as of 2026-08-09. Check its 'Doing business in California' page for the year you are filing rather than assuming. Once an LLC is doing business in California it owes the flat $800 annual tax under § 17941, and on top of that the § 17942 fee on total income from all sources attributable to California: $900 at $250,000 to $499,999, $2,500 at $500,000 to $999,999, $6,000 at $1,000,000 to $4,999,999, and $11,790 at $5,000,000 and above. Open point: nothing in the primary sources settles whether sales made THROUGH a marketplace facilitator count toward the LLC's own § 23101 sales figure. § 23101 is a franchise/income-tax nexus provision, not the sales-tax code, and it carries no marketplace carve-out of the kind the sales-tax rules have.

Setting Up to Sell on eBay from California

1. Confirm every California sale runs through eBay before skipping the seller's permit

   The marketplace-only exemption only holds if there's no independent in-state sale at all, so track your channels carefully.

2. Check whether what you resell falls under California's narrow secondhand-dealer scope

   Serial numbers, personal inscriptions and pawned property are what trigger the license, not used goods generally.

3. Form the LLC with California's own annual tax and fee already budgeted in

   Unlike most states in this cluster, California adds a real cost of its own once the LLC is doing business here, so plan for it upfront rather than discovering it later.

4. Get a California seller's permit yourself if you make any sale outside the marketplace

   Even a single independent sale removes the marketplace-only exemption for your registration status.

5. Revisit your LLC's California income each year against the current fee tiers

   The Franchise Tax Board publishes updated figures periodically, so check the current year's numbers rather than relying on what applied last year.

What We Could Not Confirm for California

These pages only state what a primary source establishes. For California we could not confirm the following, so this page does not answer it:

• whether marketplace sales count toward the economic-nexus threshold

Who to Ask in California

The California Department of Tax and Fee Administration handles seller's permits, resale-certificate questions and the marketplace-seller registration exemption. The Franchise Tax Board handles the LLC's own annual tax and gross-receipts fee, entirely separate from anything CDTFA tracks. For the secondhand-dealer question specifically, your local police department or sheriff's office is the actual licensing authority, with the Department of Justice reviewing applications behind the scenes. The Secretary of State's office handles the LLC filing itself, which is separate again from both CDTFA and the Franchise Tax Board, so a California LLC selling on eBay is realistically coordinating with three different state offices rather than one.

Sources

• https://cdtfa.ca.gov/lawguides/vol1/sutr/1684-5.html
• https://www.cdtfa.ca.gov/formspubs/pub109/
• https://www.ftb.ca.gov/file/guide-to-information-returns-filed-with-california.html
• https://www.ftb.ca.gov/file/business/information-returns.html
• https://www.ftb.ca.gov/file/personal/income-types/information-returns-1099.html
• https://www.cdtfa.ca.gov/lawguides/vol1/sutr/1668.html
• https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=21626.&lawCode=BPC
• https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=21627.&lawCode=BPC
• https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=21640.&lawCode=BPC
• https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=21641.&lawCode=BPC
• https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=RTC&sectionNum=23101
• https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=RTC&sectionNum=17942
• https://www.ftb.ca.gov/file/business/doing-business-in-california.html
• https://www.irs.gov/instructions/i1099k

Federal 1099-K threshold: IRC § 6050W(e), as amended by § 70432(a) of the One, Big, Beautiful Bill Act (P.L. 119-21, July 4, 2025). A third-party settlement organization such as eBay must file Form 1099-K only if BOTH tests are met for the calendar year: gross payments exceed $20,000 AND the number of transactions exceeds 200. These are the figures for tax year 2026. There is no forward phase-in: § 70432(a) takes effect "as if included in section 9674 of the American Rescue Plan Act," so the same $20,000 / 200 figures apply retroactively to calendar years after 2021 (tax years 2022 through 2026 alike). The $600 threshold enacted by ARPA § 9674 (P.L. 117-2) was repealed before it operated, and the IRS transition-relief thresholds previously announced for 2024 and 2025 are superseded. A platform may issue a 1099-K below these figures, and a state may set a lower TPSO threshold, in which case a seller can receive a 1099-K without meeting the federal test.. Verified 2026-08-08.