The California Department of Tax and Fee Administration identifies unregistered sellers by analyzing revenue data, marketplace reporting, federal tax filings, and cross state information sharing.<\/p>\n\n\n\n
Businesses may be flagged when:<\/strong><\/p>\n\n\n\n Unregistered sellers with nexus exposure may face audit assessments and penalties.<\/p>\n\n\n\nRun Your Nexus Risk Check<\/a>\n\n\n\n California receives transaction level information from marketplace facilitators and payment processors.<\/p>\n\n\n\n The CDTFA may compare:<\/strong><\/p>\n\n\n\n If revenue exceeds thresholds and no registration exists, enforcement may follow.<\/p>\n\n\n\n California may compare:<\/strong><\/p>\n\n\n\n If federal income tax filings show significant revenue but no California registration exists, risk increases.<\/p>\n\n\n\n California Sales Tax Audit Risk<\/strong><\/a><\/p>\n\n\n\n States share information related to:<\/strong><\/p>\n\n\n\n If another state identifies nexus, California may evaluate whether similar exposure exists.<\/p>\n\n\n\n Once identified, the CDTFA may:<\/strong><\/p>\n\n\n\n If nexus existed before contact, voluntary disclosure options may become limited.<\/p>\n\n\n\n Businesses can reduce enforcement exposure by:<\/strong><\/p>\n\n\n\n Acting before receiving state contact generally preserves more flexibility.<\/p>\n\n\n\n If your business may have exceeded the California economic nexus threshold without registering, evaluate exposure before receiving contact.<\/p>\n\n\n\nRun Your Nexus Risk Check<\/a>\n\n\n\n Identify potential nexus exposure before enforcement escalates.<\/p>\n\n\n\n How does California know if I exceeded the nexus threshold?<\/strong> Will California audit remote sellers?<\/strong> Can I fix exposure before being contacted?<\/strong>\n
Marketplace Reporting and Data Matching<\/h2>\n\n\n\n
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Federal Tax Return Comparisons<\/h2>\n\n\n\n
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Cross State Data Sharing<\/h2>\n\n\n\n
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What Happens After You Are Flagged<\/h2>\n\n\n\n
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How to Reduce Enforcement Risk<\/h2>\n\n\n\n\n
Concerned About California Enforcement Risk<\/h2>\n\n\n\n
CDTFA Enforcement FAQ<\/h2>\n\n\n\n
California uses marketplace reporting, payment processor data, and federal tax comparisons.<\/p>\n\n\n\n
Remote sellers that exceed the economic nexus threshold without registration may face inquiry or audit.<\/p>\n\n\n\n
Yes. Addressing nexus exposure proactively may reduce penalties and audit scope.<\/p>\n\n\n\n