Starting an online business in California: permits, taxes, and website laws

Whether you're launching an online store, a subscription service, a content site, or a sports-related website, operating from California means meeting both the general business rules and some of the most detailed e-commerce and website laws in the country. This guide walks through what you need to open an online business in California, step by step.

1. Register the business

• Choose a structure. Sole proprietors file a Fictitious Business Name statement with their county if they use a name other than their own; LLCs file Articles of Organization (currently $70) with the Secretary of State, a Statement of Information within 90 days and every two years after, and pay the $800 annual minimum franchise tax to the FTB. Details are in the California guide.
• Get an EIN from the IRS (free) if you form an LLC, hire employees, or want to keep your Social Security number off paperwork.
• Register with your city for a business license or tax certificate — home-based online businesses usually still need one.

2. Sales tax and the seller's permit

If you sell tangible goods to California customers, you need a seller's permit from the California Department of Tax and Fee Administration (CDTFA). Registration is free. You'll collect sales tax at the rate for the delivery address, since district taxes vary by location. Digital products delivered electronically and most services are generally not taxable in California, but rules have exceptions — check CDTFA guidance for your product type. If you sell into other states, watch their economic-nexus thresholds too.

3. Website laws that apply to California online businesses

Privacy

• CalOPPA: post a conspicuous privacy policy if you collect personal information from California residents — which almost every online business does.
• CCPA/CPRA: applies once you pass its revenue or data-volume thresholds; covered businesses need detailed notices, a "Do Not Sell or Share My Personal Information" link where applicable, and Global Privacy Control support. See state privacy laws.

Pricing and fees

California's honest-pricing law (SB 478, effective July 1, 2024) makes it unlawful to advertise a price that doesn't include all mandatory fees or charges, other than government taxes and shipping. Build mandatory fees into displayed prices from the start.

Subscriptions and automatic renewals

California's Automatic Renewal Law requires clear and conspicuous disclosure of renewal terms before purchase, affirmative consent, an acknowledgment that explains how to cancel, and — for subscriptions sold online — a way to cancel online. Amendments effective July 1, 2025 added further requirements, including consent rules for continuing a subscription and annual reminders for some plans. Review the current statute before launching memberships, boxes, or software plans.

Proposition 65

If you sell products that expose consumers to listed chemicals, Proposition 65 can require a clear warning before purchase, including on product pages. Businesses with fewer than 10 employees are exempt, but online retailers may receive warning information from manufacturers that they must pass along. Check the OEHHA guidance for your product category.

Accessibility

Online stores in California are frequent targets of website-accessibility claims under the ADA and the Unruh Civil Rights Act. Build to WCAG 2.1 AA, especially product pages and checkout. See the accessibility guide.

4. Special case: sports websites

Sports websites — news, stats, coaching, team or league management, ticket listings, and merchandise stores — are ordinary online businesses and follow the steps above. A few areas need extra care:

• Betting and paid contests: online sports betting is not legal in California. In 2025 the California Attorney General issued a legal opinion concluding that paid daily fantasy sports contests are illegal gambling under state law. Get legal advice before offering anything involving entry fees and prizes.
• Youth sports: if your site is directed to children under 13 or knowingly collects their data, the federal COPPA Rule applies. League and camp registration forms collect sensitive information — limit what you collect and secure it.
• Trademarks and media rights: team names, logos, and game footage are protected. Use them only with permission or within fair-use and editorial limits.
• Tickets: resale and all-in pricing rules apply to event tickets, and the federal FTC fee rule specifically covers live-event ticketing.

5. Operations checklist

1. Register the business and your city license.
2. Get a seller's permit if you sell tangible goods.
3. Publish a privacy policy, terms, and shipping and returns policies.
4. Show all-in prices; disclose shipping costs before checkout.
5. Set up compliant auto-renewal flows for any subscription.
6. Check Prop 65 warning needs for your products.
7. Test the site against WCAG 2.1 AA.
8. Use a PCI-compliant payment processor and enable multi-factor authentication on every admin account.

Related guides

Frequently asked questions