How to Sell on Shopify in California: Seller Guide

If you want to sell on Shopify in California, the store itself is the easy part. Shopify can have you live in an afternoon. The harder part is that California puts more rules on a small online seller than almost any other state: an $800 annual LLC tax that starts in year one, a sales tax that changes with the customer’s delivery address, a city or county business license, and Proposition 65 warning rules that reach into your product pages. This guide explains each one, then shows how to set up Shopify for California from your first order.

Quick Answer

To sell on Shopify in California: (1) choose a business structure and, if you want an LLC, file Articles of Organization online with the Secretary of State ($70) and a Statement of Information within 90 days ($20); (2) budget for the $800 annual LLC tax owed to the Franchise Tax Board; (3) get a free seller’s permit from the CDTFA before your first sale; (4) check your city or county business license; (5) pick a Shopify plan (Basic is $39/month, or $29/month billed yearly) and add your California registration under Settings > Taxes and duties; and (6) check whether any product needs a Prop 65 warning on its product page.

In this guide

1. Why California is different for Shopify sellers
2. California legal setup, step by step
3. California sales tax on a Shopify store
4. Prop 65 warnings for online stores
5. Setting up Shopify for California
6. What it costs to sell on Shopify in California
7. Worked example: a first-year budget
8. Common mistakes California sellers make
9. Tips to grow faster
10. FAQ

Why California Is Different for Shopify Sellers

Three things set California apart from most states, and all three affect a Shopify store directly:

• A fixed cost before your first sale. Every LLC that is organized or doing business in California owes an $800 annual tax, even in a year with no sales.
• Your own store means your own tax compliance. On Amazon or Walmart, the marketplace usually collects and remits sales tax for you. On your own Shopify storefront you are the retailer, so registering, collecting, filing and paying are your job.
• Consumer-protection rules that touch product pages. Proposition 65 can require a warning to appear before a California shopper completes an online purchase.

If you have read our guide to starting a Shopify store in Texas, the contrast is clear: Texas has no state income tax and a no-tax-due threshold for its franchise report, while California charges a flat minimum from the start.

California Legal Setup, Step by Step

1. Decide whether you need an LLC now

An LLC separates your personal assets from the business, which matters once you hold inventory, sign supplier agreements or run paid ads. In California, though, an LLC also brings the $800 annual tax. The first-year exemption only covered tax years beginning from 2021 through 2023, so a new LLC owes the tax in its first year. The $800 described here applies to LLCs; if you are weighing a different structure, ask a California CPA how it would be taxed before you file anything.

2. File Articles of Organization ($70)

California LLCs are formed by filing Articles of Organization through bizfile Online, the Secretary of State’s portal. The Secretary of State’s LLC fee schedule lists the filing as online only, with a $70 fee. You will need an available name, an address and a California agent for service of process.

3. File the Statement of Information within 90 days ($20)

New California sellers miss this deadline more than any other. The Statement of Information is due within 90 days of forming the LLC and every two years after that, at $20 per filing. Skipping it can trigger a $250 penalty that the Franchise Tax Board collects for the Secretary of State. Since August 1, 2026, bizfile Online requires User Access before you can file it, so set that up as soon as your LLC is approved.

4. Plan for the $800 annual tax and the LLC fee

According to the Franchise Tax Board’s LLC page, your first $800 payment is due by the 15th day of the 4th month after you file with the Secretary of State, using form FTB 3522 if you pay by mail. After that it is due by the 15th day of the 4th month of each tax year, and it keeps coming due until you formally cancel the LLC.

Once your total California income passes $250,000, an additional LLC fee applies on top of the $800: $900 for $250,000–$499,999, $2,500 for $500,000–$999,999, $6,000 for $1,000,000–$4,999,999 and $11,790 for $5,000,000 or more. You estimate and pay it with FTB 3536 by the 15th day of the 6th month, and the LLC files Form 568 as its return.

5. Get a free seller’s permit from the CDTFA

If you are engaged in business in California and sell physical products that are normally taxable, you need a seller’s permit from the California Department of Tax and Fee Administration. The CDTFA seller’s permit FAQ confirms there is no fee, though the agency may ask for a security deposit. Individuals need one too, not just LLCs. Apply before you take your first order.

6. Check your city or county business license

A seller’s permit is not a business license; the CDTFA itself tells sellers to contact their city or county for that. Most California cities issue a business license or business tax certificate, and the county handles unincorporated areas. The state’s CalGold tool lists the permits you are likely to need by business type and location.

California Sales Tax on a Shopify Store

California’s statewide base sales and use tax rate is 7.25%. Many cities and counties add voter-approved district taxes of 0.10% to 2.00% on top, so the total rate depends on location, and two California orders can carry different rates.

California-based sellers

If your business is located in California, you collect tax on taxable sales to California customers once you hold a seller’s permit. You then report and pay the tax and keep adequate records.

Sellers outside California

If you run your Shopify store from another state, California’s economic nexus rule applies: you must register with the CDTFA and collect California use tax once your sales of tangible goods delivered into California exceed $500,000 in the current or preceding calendar year.

What about marketplace facilitator rules?

California’s marketplace rules make large marketplaces collect tax on the sales they facilitate for third-party sellers. That helps if you also sell on a marketplace like Amazon, but it does not cover orders placed on your own Shopify website, where you are the seller. One exception: Shopify says its Shop channel collects, remits and files sales tax on orders shipping within the United States. Check which channel each order came through before you file.

Prop 65 Warnings for Online Stores

Proposition 65 requires a clear and reasonable warning before a business exposes someone to a chemical on the state’s list. For a Shopify store, these are the parts that matter:

• Who it covers: businesses with 10 or more employees doing business in California. Businesses with fewer than 10 employees are exempt from the warning requirements, but supplier contracts can still require you to display warnings.
• Out-of-state stores are not exempt. A store based elsewhere that ships to California must follow the same rules for its California sales.
• Where the warning goes: for the official safe harbor, the warning must be on the product display page, behind a clearly marked “WARNING” link, or otherwise prominently shown before the purchase is completed. This online warning is in addition to the warning on or with the product.
• Who supplies it: manufacturers, importers and distributors carry primary responsibility, but retailers must place and maintain the warning materials they receive.

The official Prop 65 FAQ for businesses covers the details, including new short-form warning language that becomes mandatory for safe harbor on products manufactured from January 1, 2028. In practice, ask suppliers whether each product needs a warning and keep their answers on file.

Setting Up Shopify for California

With the paperwork in motion, set up the store:

1. Pick a plan. Shopify currently offers a 3-day free trial, then $1/month for 3 months on most plans. Most new stores start on Basic.
2. Use your business details. Enter your legal business name and address in store settings and in Shopify Payments so payouts go to the business bank account.
3. Add your California registration. In the Shopify admin, go to Settings > Taxes and duties > United States, choose Collect sales tax, select California and enter your seller’s permit number. Shopify does not register you with the state. Shopify also lets California sellers choose between destination and hybrid origin sourcing, so confirm the right option with your tax advisor.
4. Add Prop 65 warnings where needed. Use a product metafield or theme block to show supplier-provided warnings on the product page before checkout.
5. Run test orders to California addresses in a few different cities and confirm the tax line changes as expected.

If you would rather have the store built right from the start, our Shopify website design and development service covers theme setup, product pages, tax settings and ongoing store management.

What It Costs to Sell on Shopify in California

Shopify prices below come from the Shopify pricing page; state fees come from the official sources linked above.

Cost item	Amount	How often
Articles of Organization (LLC)	$70	Once
Statement of Information	$20	Within 90 days, then every 2 years
LLC annual tax (FTB)	$800	Every year
LLC fee (California income over $250,000)	$900 to $11,790	Every year, if it applies
CDTFA seller’s permit	$0 (deposit possible)	Once
City or county business license	Varies by location	Usually yearly
Shopify Basic	$39/month, or $29/month billed yearly	Monthly or yearly
Shopify Grow	$105/month, or $79/month billed yearly	Monthly or yearly
Shopify Advanced	$399/month, or $299/month billed yearly	Monthly or yearly
Online card rates (Shopify Payments)	2.9% + 30¢ Basic, 2.7% + 30¢ Grow, 2.5% + 30¢ Advanced	Per order
Third-party payment provider fee	2% Basic, 1% Grow, 0.6% Advanced	Per order, if not using Shopify Payments

Worked Example: A First-Year Budget

Illustrative numbers only, not a real business. Maria runs a one-person candle brand from home in Sacramento. She forms an LLC, gets a seller’s permit and chooses Shopify Basic billed yearly.

• State fixed costs in year one: $70 + $20 + $800 = $890
• Shopify Basic at $29/month for 12 months = $348 (less if she uses the $1 introductory months)
• Fixed total before her city license, domain, apps and inventory: about $1,238

Now say she sells 200 candles at $40 each in a busy December, $8,000 in sales. Card processing on Basic is 2.9% of $8,000 ($232) plus 30¢ on 200 orders ($60), or $292. If those orders ship to an area with a 7.75% combined rate, she collects $620 in sales tax. That money belongs to the CDTFA, so she keeps it in a separate account. Because her yearly sales stay well under $250,000, she owes the $800 tax but no additional LLC fee.

Common Mistakes California Sellers Make

• Treating the $800 as a one-time formation fee. It is due every year until the LLC is cancelled, even with zero sales.
• Missing the 90-day Statement of Information. A $20 filing turns into a $250 penalty.
• Turning on Shopify tax collection without a permit. Register first, then switch it on.
• Charging a flat 7.25% everywhere. District taxes mean many California deliveries need a higher rate.
• Skipping the local license because the store is online-only.
• Ignoring Prop 65 until a 60-day notice arrives. Ask suppliers about warnings before you list products.

Tips to Grow Faster

• Put every state deadline on your calendar the day your LLC is approved: Statement of Information, FTB 3522, and FTB 3536 if you expect to pass $250,000.
• Start on Basic and upgrade when the numbers justify it. Grow’s lower card rate pays off only when monthly sales are high enough to cover the extra $66/month (monthly billing).
• Add a second channel once the store works. Many Shopify brands later list on a marketplace for extra reach; see our Amazon micro private label service if that is your next step.
• Get a second pair of eyes before launch. A 30-minute consultation with our team can catch gaps in your store, tax settings and product pages before customers do.

FAQ

Do I need an LLC to sell on Shopify in California?

No. Shopify does not require an LLC, and the CDTFA issues seller’s permits to individuals too. An LLC adds liability protection but also the $800 annual tax, so weigh both with a California CPA.

How much does a California seller’s permit cost?

Nothing. The CDTFA charges no fee for a seller’s permit, though it may require a security deposit depending on your situation.

Does Shopify collect and pay California sales tax for me?

Once you add your California registration, Shopify calculates and collects tax at checkout. For orders on your own storefront you are still responsible for filing returns and paying the CDTFA. Orders through Shopify’s Shop channel are an exception that Shopify handles itself.

I live outside California. Do I need to register there?

Generally only if your deliveries of tangible goods into California exceed $500,000 in the current or previous calendar year, or if you have a physical presence there, such as inventory or employees.

Does Prop 65 apply to a small Shopify store?

Businesses with fewer than 10 employees are exempt from the warning requirements, but suppliers or retail partners may still require warnings by contract. Once you reach 10 employees, the rules apply to your California sales.

Conclusion

Selling on Shopify in California is very doable if you treat the state’s rules as part of the launch plan rather than an afterthought. Form your LLC if it makes sense, file the Statement of Information on time, budget the $800 every year, get your free seller’s permit and local license, set up Shopify’s tax settings correctly and check your products for Prop 65. If you want help with any part of it, contact the Msharf team or read more about our founder, Mohammad Sharfuddin.

Note: The information in this guide is based on official sources (California Secretary of State, Franchise Tax Board, CDTFA, OEHHA and Shopify) as of November 2026 and can change. Check the linked sources or a qualified tax professional before making decisions.