California Economic Nexus for Remote Sellers
California economic nexus determines when a remote or out-of-state seller is required to collect and remit California sales and use tax based on sales activity in the state.
California sales and use tax is administered by the California Department of Tax and Fee Administration (CDTFA).
When Does Economic Nexus Apply in California?
A remote seller generally establishes economic nexus in California when its sales into the state exceed California’s economic nexus threshold.
Once economic nexus is established, the seller must:
- Register with the CDTFA
- Collect California sales or use tax on taxable transactions
- File sales and use tax returns
Destination-Based Sales Tax in California
California uses a destination-based sales tax system for district taxes. Remote sellers with economic nexus must determine the correct local district taxes based on the customer’s location.
This often requires applying multiple district tax rates in addition to the statewide base rate.
Economic Nexus and Marketplace Sellers in California
California has marketplace facilitator rules that may require marketplace operators to collect and remit tax on behalf of third-party sellers.
However, sellers making direct sales outside of marketplace platforms may still have independent economic nexus obligations.
Sales and Use Tax Rates After Nexus Is Established
Once economic nexus applies, sellers must collect:
- California state sales tax
- Applicable local district taxes
For an overview of how state and local tax rates apply, see our guide on sales and local tax rates.
Official California Guidance
Authoritative guidance on economic nexus and remote sellers is published by the California Department of Tax and Fee Administration.
Final Note
California economic nexus rules are complex due to district taxes. Remote sellers should regularly review CDTFA guidance to ensure proper compliance.
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