If your business is located in California, your Internet sales of physical products are generally taxable, unless they qualify for specific exemption. For sales tax purposes, Internet sales are treated like sales made at stores, through sales representatives or by mail order.

If your business is located outside of California, sales of products delivered to California locations are subject to use tax. Use tax rates are the same as sales tax rates for any given California location. Your customers are responsible for payment of the use tax but you must collect it from them if you:

 Have a permanent or temporary business location in California

 Have any sales representative or agent in the state, even temporarily

 Receive payments from the lease of merchandise located in California

Some Internet sales that are exempt from sales tax include sales for resale, sales of cold food products, and sales of merchandise delivered outside of California. Also exempt are products electronically transmitted to customers — such as software, data and digital images. If you provide a hard copy (like a CD or floppy disk) in addition to electronic transmission, the sale is usually taxable.

For more information, call the Information Center at the State Board of Equalization (800-400-7115) or go to the BOE website at www.boe.ca.gov (this link opens in a new window). Internet sales are discussed in BOE Publication 109.