Hi,

We've just formed a California wholesale import/export corporation and opened a bank account. Next step would be to obtain a seller's permit. I've called CA's Board of Equalization in order to clear up a few questions on the application form, but when they heard that our selling point will be overseas (export), they said that a seller's permit is not required for us, because there is no sales tax for exports.

I've tried to explain that in order for us to export, we need to procure the goods somewhere.... and she cut me off by saying that if we sell abroad, we must pay the sales tax to our vendors, and can not issue a resale certificate to avoid paying the sales tax. She also said, that if we do issue such certificate and do not pay the tax to the vendor, it will be considered as misdemeanor and will result in fines and penalties. Finally, I was told to go on their website and do some research.

And so I did... I've found around 10 publication that may be connected with our line of business and a few publications concerned with seller's permits, sales for resale, etc.

Here is an excerpt from a publication called "Do I need a California seller's permit?": "...Please note: You should not obtain a seller’s permit just to take advantage of the
opportunity to issue resale certificates to your suppliers. Issuing a resale certificate
to avoid paying tax on items you will use rather than sell is against the law and
may result in fines and penalties. If you are not making sales, your permit may be
canceled...". Also, similar statement may be found in other publications, however, all of them imply that a resale certificate may only be used if the items purchased are for resale and not for personal/business use.

In my understanding, resale is when one purchases from one place and then sells the same items to another, regardless of weather the sale is being done domestically or internationally.

I need your advise: whom to believe? The lady at the call center or the publications on their website. Is my interpretation of "resale" correct? Will it be OK to issue a resale certificate and not pay CA sales tax to our vendors without consequences?

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Thank you.