Operations
Sales tax registration for direct selling distributors in California, Texas and Florida
Nexus thresholds, permits, fees and filing schedules for direct selling distributors registering for sales tax in California, Texas and Florida.
What to take away
- Economic nexus counts sales into a state, not your total 1099 income. California's line is $500,000 in delivered sales, Texas counts $500,000 in total Texas revenue, and Florida counts $100,000 in taxable sales.
- A marketplace facilitator collects tax on its own platform, not on your website or in-person sales.
- All three states issue the permit free of charge.
- Register when you cross, not in January. Sales after the crossing date can be assessed later with penalties.
- Keep ship-to totals, signed resale certificates and platform reports in one folder per state.
When a distributor becomes a remote seller
States use an economic nexus standard instead of a physical presence test. The measure is sales delivered into the state over a set period.
Timing is not tied to the calendar. Cross in October, register in October. Penalties attach to sales made after the crossing date.
The distributor who buys at wholesale and resells owns the retail sale, so the duty sits there rather than with the upline. The IRS sets out the difference between an independent contractor and an employee, which decides the treatment. A comparison of 1099 and W-2 treatment shows what changes on the return.
The three nexus thresholds, side by side
California counts delivered sales, shipping included. Texas counts all revenue, taxable or exempt. Florida counts taxable sales only, so exempt sales do not move you toward the line.
How States Count Nexus Thresholds
Dollar threshold
- What counts
- Sales into state
- Who gets caught
- One large order
- When duty starts
- After threshold crossed
- Back taxes risk
- Yes, after crossing
Transaction threshold
- What counts
- Number of sales
- Who gets caught
- Many small orders
- When duty starts
- After threshold crossed
- Back taxes risk
- Yes, after crossing
Gross sales
- What counts
- Includes shipping
- Who gets caught
- Shipping-inclusive sellers
- When duty starts
- After threshold crossed
- Back taxes risk
- Yes, after crossing
Taxable sales
- What counts
- Taxable only
- Who gets caught
- Taxable-goods sellers
- When duty starts
- After threshold crossed
- Back taxes risk
- Yes, after crossing
The three nexus thresholds
Threshold
- California
- $500,000 in sales of tangible personal property delivered into the state
- Texas
- $500,000 in total Texas revenue
- Florida
- $100,000 in taxable sales into the state
Counting period
- California
- Preceding or current calendar year
- Texas
- Preceding twelve calendar months
- Florida
- Previous calendar year
Transaction test
- California
- None
- Texas
- None
- Florida
- None
Confirm the current figure at each state portal before you rely on it, because legislatures adjust these numbers.
Registering in California with CDTFA
The California Department of Tax and Fee Administration issues the seller's permit. Apply online, and the permit itself costs nothing. The SBA lists the state filings that sit alongside it in its guide to registering your business.
Registering in California
- Gather your EIN, entity documents and a rough California ship-to sales history.
- Open an account in CDTFA online services and start a seller's permit application.
- Enter your business activity, the date you began selling into California and your estimated taxable sales.
- Submit and record the permit number.
- Post the permit and note the assigned filing frequency.
California adds district taxes on top of the state rate. The destination sets the rate. Personal volume is not a sales tax figure, but the monthly purchase requirements shape how much stock you buy for resale.
Registering in Texas with the Comptroller
The Texas Comptroller of Public Accounts issues a sales and use tax permit through the eSystems portal. There is no fee.
Registering in Texas
- Create an eSystems account and open the sales and use tax permit application.
- Enter your entity type, EIN and the address you will keep for Texas records.
- List the responsible parties and any Texas permit you have held before.
- Submit and save the eleven-digit taxpayer number.
- Keep the permit on file and check the assigned reporting schedule.
Texas collects most local sales and use taxes with the state tax, so one return usually covers both. A distributor buying stock for resale gives the supplier a Texas resale certificate instead of paying tax. Whether the supplier treats you as a business buyer or an employee turns on the IRS worker classification tests.
Registering in Florida with the DR-1
The Florida Department of Revenue takes registration on form DR-1, the Florida Business Tax Application.
Registering in Florida
- Open a Florida e-services account and start the DR-1.
- Select sales and use tax, plus any other tax the business owes.
- Give the entity type, FEIN, business address and a NAICS code.
- List the counties where you hold a location or regularly ship.
- Save the certificate and note the first return due date.
Florida adds a county discretionary surtax, and Miami-Dade applies its own rate to taxable sales above a set amount. The ship-to county decides the rate. A distributor with a Miami-Dade warehouse should check local taxes beyond sales tax.
Fees, processing times and filing cadence
Permit fees are zero in all three states. The processing times and cadences below are typical planning figures, not promises from the state. Business licenses are separate and vary by city or county, as the SBA's licenses and permits guide explains.
Registration route
- California
- CDTFA online seller's permit
- Texas
- Comptroller permit through eSystems
- Florida
- Form DR-1 through DOR e-services
Permit fee
- California
- None
- Texas
- None
- Florida
- None
Typical processing
- California
- Days to a few weeks
- Texas
- Two to three weeks by mail
- Florida
- A few weeks
Common cadence
- California
- Quarterly, then monthly
- Texas
- Quarterly, then monthly
- Florida
- Quarterly or monthly
Texas monthly returns are due on the 20th of the following month. Florida returns are due the 1st and count as late after the 20th. California quarterly returns are due the last day of the month after the quarter closes.
Trade association membership does not replace any of this, as our review of whether DSA membership is worth it sets out.
Records a nexus review asks for
A review usually opens with a questionnaire about ship-to sales, then a short window to respond.
Records for a Nexus Review
- Sales by ship-to state, by month
- Threshold calculations for each state
- Registration confirmations and permit numbers
- Filed returns and payment receipts
- Resale and exemption certificates
- Marketplace facilitator reports
- Nexus log with dates
- Ship-to sales totals by month for each state
- Platform facilitator reports showing tax collected
- Signed resale or exemption certificates, kept current
- Every filed return, including zero returns, with confirmations
- Refund and credit notes tied to tax adjustments
- A dated note of when you first crossed each threshold
Without the folder, a state can assess tax on estimated sales rather than your actual figures.
