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California Bond of Seller

Price Varies / 1 year term

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UPDATED NOTICE: THE CALIFORNIA STATE BOARD OF EQUALIZATION HAS ELIMINATED THE SURETY BOND REQUIREMENT FOR INDIVIDUALS TO OBTAIN THEIR SELLER’S PERMIT.

How much does a bond of seller cost in California?

The California State Board of Equalization requires any person who sells taxable items in the state to obtain a surety bond. The bond requirement is the lesser amount of the following:

  • twice the estimated average liability of people filing returns for quarterly periods
  • three times the estimated average liability of people filing returns for monthly periods
  • $50,000

Applicants should verify their required bond amount with the state prior to bonding.

Why do I need this bond?

A seller’s bond protects the people of California by helping ensure that businesses pay all of their taxes according to the Revenue and Taxation Code. In the event of fraud, embezzlement or any of a number of violations against the provisions of the code, the state can file a claim against the principal (seller).

If the claim is valid, the bond protects the state from financial losses up to the full amount of the bond. The principal then must reimburse the surety for any sums paid out.

What’s the fine print?

The California State Board of Equalization requires sellers to post surety bonds according to the California Revenue and Taxation Code. These bonds are valid for as long as the entity possesses a valid seller’s permit. To terminate the bond, the surety must send the board a notice of cancellation. The bond is officially terminated 30 days after the board receives the notice. The surety remains liable for recovering damages on valid claims during this 30-day period.

How to become a seller in California

In addition to posting a surety bond, a seller must acquire a seller’s permit from the California State Board of Equalization. This allows individuals and corporations to sell taxable items legally within the state. To complete the registration process, applicants must provide the following information:

  • Names and addresses of suppliers
  • North American Industry Classification System code
  • Driver’s license number
  • Social security number
  • Federal Employer Identification Number
  • State Employer Identification Number
  • Standard Industrial Classification

Call 1 (800) 308-4358 to talk with a Surety Expert