Sam Brotman, JD, LLM, MBA November 20, 2020 3 min read

Sales Tax Requirements for Retailers Outside of California


Sam Brotman, JD, LLM, MBA

Owner and Director of Legal
Brotman Law

An out-of-state retailer “engaged in business in this state” (California) is required to register, collect use tax on taxable sales made to consumers in California, and remit this tax to the California Department of Tax and Fee Administration. Revenue and Taxation Code section 6203 provides that “retailer engaged in business in this state” specifically includes, but is not limited to, any of the following:

  • Any retailer maintaining, occupying, or using, permanently or temporarily, directly or indirectly, or through a subsidiary, or agent, by whatever name called, an office, place of distribution, sales or sample floor or place, warehouse or storage place, or other place of business.
  • Any retailer having any representative, agent, salesperson, canvasser, independent contractor, or solicitor operating in this state under the authority of the retailer or its subsidiary for the purpose of selling, delivering, installing, assembling, or the taking of orders for any tangible personal property.
  • As respects a lease, any retailer deriving rentals from a lease of tangible personal property situated in this state.

Clearly, maintaining an office space or having an agent in California can lead to tax liability to the California Department of Tax and Fee Administration for an out-of-state retailer. Section 6203 does not stop here, and mandates the following: “Any retailer entering into an agreement or agreements under which a person or persons in this state, for a commission or other consideration, directly or indirectly refer potential purchasers of tangible personal property to the retailer, whether by an internet-based link or an internet website, or otherwise, provided that certain conditions are met.” 

Consequently, if an out-of-state retailer, including an online retailer/store, has an agreement with a California agent/contractor/marketer/advertising agent/affiliate or anyone else who refers clients to retailer’s website, then the out-of-state retailer also must register with the CDTFA and collect use tax on taxable sales made to consumers in California.

Section 6203 also imposes such liability to the California Department of Tax and Fee Administration in cases when the out-of-state retailer is simply a part of a larger corporate or holding group, where another member of that group is located in California and in agreement with retailer performs services in California to design and develop tangible personal property sold by retailer, or makes solicitation of sales of tangible personal property on behalf of retailer, or provides other services regarding tangible personal property to be sold by retailer.

Form CDTFA–1164 is usually used by the auditor in the proper registration of out-of-state vendors who are engaged in business in California. A separate Form CDTFA–1164 is prepared for each vendor. 

"Sam is a wonderful, results-oriented and extremely knowledgeable and talented attorney, who really has 'heart' in working on behalf of his clients, and explains options in a straightforward, respectful manner. He has assisted us with great outcomes which have added to our quality of life. I would not hesitate to recommend Sam for his services as he is an ethical, personable and expert attorney in his field. You will likely not be disappointed with Sam's work ethic, approach and his efforts."

-Aileen Dwight, Licensed Clinical Social Worker & Psychotherapist

Last updated: July 2, 2022

Receive the Best of
Brotman Law

Get this topic delivered straight to your inbox.

New call-to-action

Sam Brotman, JD, LLM, MBA

Owner and Director of Legal
Brotman Law



Our best stuff: secrets, tax saving tools, and tax defense strategies from the braintrust at Brotman Law.

  • Expanded benefits during your first consultation with the firm.
  • Priority appointment scheduling and appointment times.
  • Complementary access to our firm’s concierge services.
  • Receive updates and “insider only” tax strategies and tactics.
  • And many more benefits.

Not Sure Where to Start?

Step 1 Start Here

Start Here

These ten big ideas will change the way you think about your taxes and your business.

Start Here

Step 2 Learn About Your Situation

Learn About Your Situation

Find the articles and videos you need to make the right tax decisions in the learning center.

Visit the Learning Center

Step 3 Explore Our Services

Explore Our Services

It is not just about what we do, but who we are, why we do it, and how that benefits you.

View All Services

Step 4 Get Your Game Plan

Get Your Game Plan

Meet with us to outline your strategy. No further obligation, 100% money-back guarantee.

Book an Action Plan