Tax Guide for Florists (2024)

Maintaining complete and concise records will help you keep track of your sales and purchases and will assist you when preparing your sales and use tax returns. You are required to keep records for at least four (4) years, unless directed by us to keep them longer. Not maintaining records may be considered evidence of negligence or as an intent to evade the tax laws. This may result in penalties.

Your records should be adequate so our representatives may:

• Verify the accuracy of your tax returns; and
• Determine if you have correctly paid the tax due on your sales and purchases.

Records you should keep include, but are not limited to:

• Cash register tapes and receipts
• Purchase invoices
• Sales invoices
• Shipping documents
• Resale certificates
• Tax returns and supporting documents

For more information on recordkeeping, please see publication 116, Sales and Use Tax Records.

Use tax is a companion to California's sales tax and is generally due whenever you purchase taxable merchandise without payment of California sales tax from an out-of-state vendor for use in California. You also owe use tax on merchandise that you remove from your inventory and use in California when you did not pay tax at the time of purchase.

If you use or give away taxable merchandise such as flowers or other merchandise you purchased without paying tax, you owe the use tax – usually equal to the sale tax – based on the cost of the merchandise to you.

To pay use tax, report the purchase price of the taxable merchandise under “Purchases Subject to Use Tax” on your sales and use tax return. Those purchases become part of the total amount that is subject to tax.

Registering for a seller's permit is free, although in some cases a security deposit may be required.

If you have more than one sales location, you generally must separately register each individual location with us.

You can register with us for a seller's permit using our Taxpayer Online Service Portal.

Be sure to let us know about any changes to your business, or to your mailing or email address so we can keep our records updated and inform you of important changes in laws, tax rates, or procedures. You can easily update your account information through our online services system by logging in with a username and password. You may also contact our Customer Service Center or any one of our offices throughout the state. Contact information is available in the Resources section of this guide.

District taxes are voter-approved taxes imposed by cities, counties and other local jurisdictions. District taxes are added to the statewide base rate. As a retailer, you are responsible for reporting your retail sales and paying the tax to us at the proper rate. If you make retail sales in California from a business located in a taxing district, you are generally responsible for the district sales tax. You are also responsible for collecting, reporting, and paying the district use tax when you make sales that will be delivered into taxing districts when you are considered “engaged in business in the district.”

Generally, you are “engaged in business” in a district when you meet one of the following conditions. You:

• Have a permanent or temporary business location in the district, including a warehouse, salesroom, or office,
• Own or lease tangible or real property, including but not limited to, a computer server in the district,
• Have a representative or agent in the district, even temporarily, who, for example, makes sales, takes orders, or makes deliveries for you,
• Receive rental income from the lease of merchandise located in the district, or
• Make annual sales of merchandise in California, or for delivery in California exceeding $500,000*.

  * On and after April 25, 2019, a retailer is considered engaged in business in all districts that impose a district tax if in the preceding or current calendar year the retailer and all persons related to the retailer pursuant to Internal Revenue Code section 267(b) and the regulations thereunder have total combined sales of merchandise in this state or for delivery in this state that exceed $500,000. All retailers meeting this threshold are responsible for collecting and paying district tax on taxable sales made for delivery in any district that imposes a district tax.

For more information on being engaged in business and to find the correct district tax rates, please see publication 44, District Taxes (Sales and Use Taxes) or our Local and District Tax Guide for Retailers.

You can look up tax rates by city and county or find the full tax rate in your city or county by going to the California City & County Sales & Use Tax Rates webpage.

As a florist, your sales may involve customers who walk into your store or who come to your mobile location such as at a street corner, swap meet, or farmer's market. In addition, your sales may include orders placed by customers through telephone, fax, Internet, or wire service. You may also fulfill orders taken by other florists or retailers of flowers and instruct other florists to fulfill your orders.

Generally, your charges for the sale of flowers and merchandise, as well as related delivery and service charges (i.e. wire, fax, or telephone) are taxable. As a florist, your business might include providing other taxable services such as decorating and designing in connection with the sale of flowers and charges for these services are generally subject to tax.

Delivery by Another Florist

If you are a florist and you instruct another florist to fulfill your sale for a customer, you are considered the retailer and responsible for collecting, reporting, and paying the tax. This is true even if you sell to an out-of-state customer and instruct an out-of-state florist to fulfill your sale.

Delivery for Another Florist or Retailer of Flowers

If other florists or retailers of flowers who are not florists under Regulation 1571 instruct you to fulfill their sale for their customer, they are responsible for collecting, reporting, and paying the tax. You are not responsible for the tax on transactions that you fulfill the sale on behalf of another florist or retailer of flowers.

You should maintain documentation demonstrating that other retailers instructed you to fulfill their sales.

You need to register temporary locations, even if you already hold a seller's permit for your permanent place of business. A copy of your seller's permit is required to be posted at each sales location and conspicuously displayed.

Many florists and retailers of flowers do not operate from a structure or retail shop. They may make sales from a vehicle, pushcart, wagon, or other portable method, or sell at a swap meet, flea market, or similar transient location. As a florist or retailer of flowers, you are subject to similar tax reporting requirements as a florist with a retail storefront. You are generally responsible for tax at the rate in effect at the location where the sale is made. For example, if you make over-the-counter sales in Anaheim (Orange County) in the morning, you will report those sales at the Orange County rate (at 7.75%*). Later in the day, if you make over-the-counter sales in Norwalk (Los Angeles County), you will report those sales at the rate in the city of Norwalk, which includes Los Angeles County and city of Norwalk district taxes (at 10.25%*).

*Example is using district tax rates in effect as of July 1, 2020. For more information on district tax rates, please see the heading above “Know Your Tax Rate.”

If you intend on temporarily making sales at certain venues such as but not limited to swap meets or farmers' markets, you must give the event operators, in writing, the following information:

• Business name
• Mailing address
• Telephone number
• Driver license number or state-issued identification (ID) along with the name of the issuing state
• Description of merchandise sold or displayed
• Seller's permit number

Even though it is not required, we recommend you provide a copy of your seller's permit to the event operator.

You can use the CDTFA-410-D, Swap Meets, Flea Markets, or Special Events Certification, to furnish to the operator the required information of the event where you sell your merchandise. The form is also available by calling our Customer Service Center at 1-800-400-7115 (CRS:711).

You are required to collect, report, and pay tax on the sales made at these venues using the applicable tax rate, for the jurisdiction, in effect.

You must notify the CDTFA in writing, by calling us, or by visiting one of the CDTFA offices, if you no longer make sales at a business location, including a temporary selling location registered under your account.

Please see publication 111, Operators of Swap Meets, Flea Markets, or Special Events for more information on this topic.

1. You separately state the delivery charge on the invoice, and
2. The delivery charge is not more than what you paid the common carrier or independent carrier to deliver the flowers or other merchandise.

Whether tax applies to delivery charges involves several factors. For more information about the application of tax to property delivered by your own facilities of for a delivered price, please see publication 100, Shipping and Delivery Charges, for more information on the application of tax to delivery charges.

A flower delivery service may offer proprietary networks, clearing house services, or operate as affiliate marketing sources for member florists.

When you make a direct retail sale to your customer where you directly contract with the customer, bill the customer based on the prices you set, and instruct another florist in California to fulfill the order, you are responsible for collecting, reporting, and paying the tax. This is also true if you meet the definition of florist and make a sale to an out-of-state customer and instruct an out-of-state florist to fulfill the order. However, if you are not a florist under Regulation 1571 because you do not fulfill orders for other florists, then your sales to out-of-state recipients that are fulfilled by an out-of-state florist are not subject to California tax. Maintain documents to establish that property was delivered out of state.

You may sell a combination package that includes food, such as candy and dried fruit, and nonfood merchandise, such as teddy bears, flowers, and wine. If more than 10 percent of the retail value of the entire package, not including the container, represents the value of nonfood products, tax is due based on the value of the nonfood merchandise, if you have documentation establishing the cost of the individual components. If you do not maintain records to support the cost of individual items, the entire package may be taxable. If the retail value of the nonfood products is 10 percent or less of the value of the entire package, not including the container, and the value of the container is 50 percent or less of the retail value of the entire package, the selling price of the entire package is not subject to tax. The sale of a combination package that only contains food, such as chocolate, cookies, or fruit, is generally exempt from tax.

For more information, please see publication 106, Combination Packages and Gift-Wrapping.

If your customer timely provides you with a valid resale certificate and you accept it in good faith, you do not owe tax on that sale because the sale is considered to be a sale for resale.

For more information, please see publication 103, Sales for Resale.

For example, if you install hooks on the wall at a wedding venue where you affix your customer's garland, the separately stated labor charge for such installation labor is exempt from tax. However, labor charges associated with arranging flowers into the garland prior to affixation are generally taxable as fabrication labor.

For more information, please see publication 108, Labor Charges.

As a florist under Regulation 1571, you owe tax on the entire sales price, including charges for telephone, fax, or relay fees, and any service fee or other charge. The out-of-state florist who completes the order for delivery does not owe sales or use tax on amounts received for the transaction.

On other transactions, if you intend to ship flowers or other merchandise outside of California, your sales are generally exempt from tax if the following conditions are met:

• The contract of sale requires shipment out of state,
• The merchandise is shipped directly to the customer located outside California, and
• You use your own business vehicles, the U.S. Postal Service, or a common carrier to ship the merchandise.

Example:

Suzette owns a small retail gift shop located in Victorville, California that sells various merchandise. The merchandise includes but is not limited to food, stuffed animals, balloons, greeting cards, and flowers. Suzette's sales consist mostly of storefront sales and on occasion she makes online sales through her website.

Hank goes online to Suzette's gift shop website and makes a purchase for a flower bouquet for his wife to be delivered to his residence located in Reno, Nevada. The bouquet is being shipped directly to Hank. Additionally, Hank is not an out-of-state florist with the intention of making the delivery. Suzette's sale is an exempt sale in interstate commerce and is not subject to tax.

For more information, please see publication 101, Sales Delivered Outside of California and Regulation 1571, Florists.