# 010 Licenses, Permits & Registrations Audit — WFAG LLC

*Status: v0.1 · 2026-05-04*
*Parent: 000 Entity Transition Brief*

---

## Heads-up

This is a **gap analysis**, not legal advice. Every "Action" cell should be confirmed with a CA-licensed attorney or CPA before filing. Where I cite a code section, I'm pointing you to the rule, not interpreting it for you.

---

## P0 — Immediate Exposure (this week)

### CDTFA Seller's Permit (CA Sales Tax)

| Field | Value |
|---|---|
| **Status** | ❌ Missing under WFAG. Currently borrowing Green Earth Gardeners' permit. |
| **Required because** | WFAG sells tangible personal property (seeds, apparel, merch) in CA. CDTFA requires a permit if you make 3+ sales of taxable items in 12 months. |
| **Exposure if you don't** | Civil: 25% fraud-or-evasion penalty + 10% negligence penalty + interest on unpaid use tax. Criminal: misdemeanor under RTC §7153 — $1,000–$5,000 fine, up to 1 year county jail per offense. Each completed resale certificate given with intent to evade is a separate offense. |
| **Cost** | Free to register |
| **Action** | Register WFAG online with CDTFA → [cdtfa.ca.gov](https://cdtfa.ca.gov/services/permits-licenses.htm). Use WFAG legal name + EIN. |
| **Owner** | Shalaco (or delegate to bookkeeper) |
| **Deadline** | This week. |
| **Sources** | [Pub 73](https://cdtfa.ca.gov/formspubs/pub73.pdf) · [Pub 103: Sales for Resale](https://cdtfa.ca.gov/formspubs/pub103/) · [L-642 Proper Use of Resale Certificate](https://cdtfa.ca.gov/formspubs/l642.pdf) |

> **Note on the borrowed permit**: stop using Green Earth Gardeners' resale certificate immediately, even before WFAG's permit lands. Any new purchase made on a borrowed certificate adds another potential §7153 count. If you've already used theirs for past purchases where you didn't collect/remit the use tax, that's a conversation for a CA tax attorney — voluntary disclosure programs exist and meaningfully reduce penalties when a taxpayer comes forward before audit.

#### Bifurcation: legitimate landscaper-buyer vs. resale-buyer

There are two genuinely different transaction types in the GEG arrangement, and they have different legal treatment:

| Transaction type | What's happening | Tax treatment | Resale cert needed? |
|---|---|---|---|
| **WFAG / Shalaco as end-user** (e.g., installing a landscape job, planting on a property) | GEG sells seeds to you at trade pricing. You consume them; nothing gets resold. | GEG is the retailer; **GEG collects sales tax from you** (or you self-assess use tax if buying tax-free improperly). | ❌ No. You are the end consumer. A resale cert is *wrong* here. |
| **WFAG buying for resale** (Mr. Bloom's mixes, repackaging, retail) | GEG sells seeds to you. You then resell them as products. | GEG sells tax-free against your resale cert; **WFAG collects sales tax from end customer** and remits to CDTFA. | ✅ Yes, **WFAG's own cert** under WFAG's EIN. |

What's been happening (described as "borrowing GEG's identity"): GEG buys at wholesale tier on its own permits, then bills WFAG/SFIB. That can shade legitimate (GEG is the seller of record to you, you're the end-customer paying retail-with-tax) *or* problematic (if GEG is effectively a pass-through and the sales tax never lands anywhere). The line is whether tax was collected somewhere in the chain.

**Proposed structure going forward:**
1. **Get WFAG's own resale cert this week.**
2. For end-user purchases (landscape jobs), GEG sells to WFAG at retail-with-tax. WFAG pays the tax. Clean.
3. For resale purchases, WFAG hands GEG a WFAG resale cert. GEG sells tax-free. WFAG collects tax at point of sale to end customer.
4. **Document the GEG arrangement in writing** — a one-page supplier letter naming WFAG as the buyer, listing the two transaction modes, and committing to use the right paperwork per transaction. Protects both parties if CDTFA ever audits.

> Do not assume past mixed-use is benign just because no one has knocked. Surface this with a CA tax attorney during the upcoming engagement (per `020 Consultant Architecture.md`); voluntary disclosure / amended return paths usually beat audit discovery.

---

## P0 — California Annual Obligations (already on tracker, restated for completeness)

### CA Franchise Tax Board

| Field | Value |
|---|---|
| **Status** | ⏳ First payment due ~08/15/26 |
| **Required because** | All CA LLCs owe $800 minimum franchise tax annually, regardless of income |
| **Cost** | $800/yr minimum. Form 568 (LLC Return of Income) also filed annually. |
| **Action** | Pay first $800 by 15th day of 4th month after formation. Register at ftb.ca.gov. |
| **Owner** | J7 Bookkeeping (Jade) — confirm scope |
| **Deadline** | ~08/15/26 |

### CDTFA — Use Tax Filing Frequency (Phoenix's move)

| Field | Value |
|---|---|
| **Status** | ✅ Phoenix-led — she's restructured to avoid quarterly use tax filings altogether |
| **Why it matters** | Quarterly filings are operational drag — four touchpoints/yr, four chances to forget, four reconciliations. Annual is one. |
| **Mechanism (likely)** | CDTFA assigns filing frequency based on annual liability. Phoenix may be moving to (a) annual filing tier, (b) account-type change (e.g., from quarterly use-tax-only registration to annual), or (c) restructuring purchases to land under an exempt category. |
| **Action** | When WFAG registers for its own CDTFA seller's permit, request annual filing frequency from the start (consistent with Phoenix's structure, assuming low-volume threshold qualifies). Note in changelog. |
| **Owner** | Phoenix + Shalaco |

---

## P1 — San Francisco Local

### SF Business Registration Certificate

| Field | Value |
|---|---|
| **Status** | ❌ Missing under WFAG. Sole prop registration (if any) does not transfer. |
| **Required because** | All businesses operating in SF must register with the Treasurer & Tax Collector. |
| **Cost** | Fee scales with gross receipts; $54–$45K range. Most micro-businesses pay the minimum. |
| **Action** | Apply at [sftreasurer.org/business/register-business](https://sftreasurer.org/business/register-business) once EIN is in hand. |
| **Renewal** | Last day of February annually (new unified Annual Business Registration & Tax Form for 2026 onward) |
| **Owner** | Shalaco |
| **Deadline** | Within 15 days of starting operations under WFAG |

### SF DBA / Fictitious Business Name (FBN) — *one per operating brand*

| Field | Value |
|---|---|
| **Status** | ❌ Missing for all four brands |
| **Brands needing FBN** | SFinBloom · Mr. Bloom's · Plant Native Plants Club · Plant Native Plants Alliance |
| **Cost** | ~$62 per FBN at SF County Clerk + 4-week newspaper publication (CA requirement) + proof of publication filed back with Clerk |
| **Action** | File one FBN per brand. Stagger if budget-constrained — start with the brand actively transacting (likely Mr. Bloom's + SFinBloom). |
| **Owner** | Shalaco |
| **Deadline** | Before transacting publicly under each brand under WFAG |

### SF Made Membership

| Field | Value |
|---|---|
| **Status** | ⏳ Update existing membership to WFAG entity |
| **Action** | Email SF Made membership team with new EIN + entity name once Articles + EIN are in hand |
| **Owner** | Shalaco |

### SF Form 571-L Business Property Statement (Personal Property Tax)

| Field | Value |
|---|---|
| **Status** | ✅ Zero exposure for WFAG, FY 25-26 |
| **Why** | Lien date is January 1 each year. WFAG didn't exist until 04/20/26. WFAG owned no business personal property in SF as of 1/1/26, so WFAG owes nothing for FY 25-26. The sole prop (Shalaco) may have a separate filing obligation as the 1/1/26 owner — see Asset Register doc. |
| **Low-value exemption** | SF City Ordinance 308-97 exempts businesses with personal property value under **$4,000**. Most micro-businesses don't get a 571-L request unless the Assessor's office estimates value >$100K. |
| **What's taxable** | Tangible business personal property in SF as of lien date — computers, furniture, fixtures, equipment, signs, leasehold improvements. |
| **What's NOT taxable** | Inventory held for resale (CA exemption), software, domains, trademarks, customer lists, and other intangibles. Real estate is taxed separately. |
| **WFAG first filing** | FY 26-27, due May 7, 2027. Whatever WFAG owns on 1/1/27 is the basis. |
| **Strategy to minimize legitimate exposure** | (1) Time large fixed-asset purchases away from year-end. (2) Track depreciated FMV honestly — old computers are worth pennies. (3) Hold inventory through the lien date — inventory is exempt. (4) Don't move intangible assets into SF; they're exempt anyway. (5) If aggregate value is under $4K, you're below the ordinance exemption. |
| **Sources** | [SF Business Property Statement](https://www.sf.gov/file-your-business-property-statement) · [SF Business Personal Property FAQs](https://www.sf.gov/information--business-personal-property-frequently-asked-questions) · [Form 571-L Manual](https://www.sfassessor.org/sites/default/files/Manual%20Guide%20for%20Filing%20Form%20571L-R-STR_rev%201.pdf) |
| **Tax rate** | 1.17143563% (unsecured property tax rate, FY 25-26) |

---

## P1 — Industry-Specific (Seeds)

### CDFA Seed Sales Authorization (CA Seed Law §52351)

| Field | Value |
|---|---|
| **Status** | ⚠️ Triggered status depends on seed mix composition |
| **Trigger rule** | Required for anyone selling **agricultural or vegetable seed** in CA. **Flower seed is exempt** from labeling/registration under CA Seed Law. |
| **Mr. Bloom's exposure** | If your "Native Wildflower Seed Mixes" are *pure flower seed*, you're exempt. If any mix contains grasses (which CA classifies as agricultural seed) or vegetable seed, registration triggers. |
| **Cost if triggered** | $40/yr registration + 0.30% assessment on gross annual sales of ag/grass/veg seed (FY ending 06/30/25 rate; rate is set annually) |
| **Label requirements if triggered** | Variety, type, purity, germination — verified by CDFA's third-party inspection program |
| **Action** | (1) Audit each Mr. Bloom's mix SKU for ag/grass/veg seed components. (2) If any are present, register with CDFA. (3) Update labels to comply. |
| **Owner** | Shalaco + Mr. Bloom's product owner |
| **Deadline** | Before next batch ships under WFAG entity |
| **Sources** | [CDFA Seed Services](https://www.cdfa.ca.gov/plant/pe/nsc/seed/) · [Seed Sales App Instructions 24-25](https://www.cdfa.ca.gov/plant/pe/nsc/docs/seed/SeedSalesApp_Instructions24-25.pdf) · [Selling Seed in CA Trifold](https://www.cdfa.ca.gov/plant/pe/nsc/docs/seed/selling_seed_trifold.pdf) · [CA Seed Law Extracts](https://www.cdfa.ca.gov/plant/pe/nsc/docs/seed/SeedLaw_2020.pdf) |

### Interstate Seed Shipping (Federal)

| Field | Value |
|---|---|
| **Status** | ⚠️ Verify before any out-of-state shipments |
| **Issue** | USDA Federal Seed Act applies to interstate shipments of agricultural/vegetable seed. Each receiving state may have its own labeling and registration requirements. Noxious weed lists vary by state. |
| **Action** | (1) Confirm what % of orders ship out-of-state. (2) If non-trivial, get the federal/state matrix from a seed-industry attorney or AOSCA. |

---

## P1 — Insurance

### Business Insurance Stack

| Field | Value |
|---|---|
| **Status** | ❌ Likely missing or under personal name |
| **What you need (at minimum)** | (1) **General Liability** (slip-and-fall, advertising injury). (2) **Product Liability** (a customer plants Mr. Bloom's seeds, claims contamination caused crop loss — this is real). (3) **Cyber/Data** if storing customer PII via Stripe/Shopify. (4) Possibly **Inland Marine** for inventory in transit. |
| **Action** | Engage a small-business insurance broker. Get quotes for a Business Owner's Policy (BOP) bundling 1+2. |
| **Owner** | Shalaco |
| **Deadline** | Before next product ship under WFAG |

---

## P2 — Federal

### IRS — EIN

| Field | Value |
|---|---|
| **Status** | ⏳ Submitted via Northwest 04/21/26, pending state formation completion |
| **Action** | Once received, save CP575 letter to Notion + workspace. |
| **Owner** | Shalaco |

### IRS — Tax Election (Form 2553 if S-Corp later)

| Field | Value |
|---|---|
| **Status** | ⏸️ Parked — single-member LLC defaults to disregarded entity (Schedule C). S-Corp election only worth it once net profit clears the breakeven. |
| **Trigger** | Revisit when annual net profit is consistently $40K+ |
| **Owner** | CPA / tax strategist |

### FinCEN — Beneficial Ownership Information (BOI) Report

| Field | Value |
|---|---|
| **Status** | ⚠️ Verify with attorney/CPA — BOI requirements have shifted in 2024–2025 due to litigation |
| **Required if** | Originally: most LLCs filed within 30/90 days of formation. Status currently in flux as of last reliable reference. |
| **Action** | Confirm current FinCEN BOI status with CPA before assuming compliance. Do **not** assume it's been repealed. |
| **Owner** | CPA / business attorney |

---

## P2 — Counterparty Account Updates (operational, not regulatory)

These are tracked in detail in `030 Migration Changelog.md`. High level:

| Counterparty | Action |
|---|---|
| **Stripe** | Update entity to WFAG + EIN; repipe payouts from "sffire" account → Mercury |
| **Mercury** | Complete application once EIN + OA in hand |
| **ShipStation** | Update billing entity, address, EIN |
| **Wholesalers** (incl. Green Earth Gardeners) | New W-9 under WFAG EIN; transition resale-certificate-on-file to WFAG's once issued |
| **Namecheap** | Domains stay under your account; add WFAG as Org on registration where applicable |
| **Google Workspace / email host** | Decide architecture (parked decision) before transitioning email |
| **Contractors (Ian, CJ, J7)** | New W-9s under WFAG EIN. Successor language already in agreements per Notion. |
| **SF Made** | Update membership to WFAG |

---

## Audit Summary

| Priority | Item | Status |
|---|---|---|
| **P0** | CDTFA Seller's Permit | ❌ File this week |
| **P0** | Stop borrowed-permit purchases; document GEG arrangement | ❌ This week |
| **P0** | CA Franchise Tax | ⏳ ~08/15/26 |
| **P1** | SF Business Registration | ❌ File post-EIN |
| **P1** | DBA filings (4 brands) | ❌ Stagger by transaction priority |
| **P1** | CDFA Seed Authorization | ⚠️ Audit mixes; file if triggered |
| **P1** | Insurance (GL + Product Liability) | ❌ Engage broker |
| **P1** | Phoenix use-tax frequency clarification | 🟡 Open thread |
| **P2** | FinCEN BOI | ⚠️ Confirm with attorney |
| **P2** | SF Form 571-L | ✅ WFAG clean for FY 25-26; first filing FY 26-27 |
| **P2** | Counterparty migrations | Tracked in 030 Changelog |

---

## Sources

- [CDTFA Pub 73 — Your CA Seller's Permit](https://cdtfa.ca.gov/formspubs/pub73.pdf)
- [CDTFA Pub 103 — Sales for Resale](https://cdtfa.ca.gov/formspubs/pub103/)
- [CDTFA L-642 — Proper Use of a Resale Certificate](https://cdtfa.ca.gov/formspubs/l642.pdf)
- [CDFA Seed Services](https://www.cdfa.ca.gov/plant/pe/nsc/seed/)
- [CDFA Seed Sales App Instructions](https://www.cdfa.ca.gov/plant/pe/nsc/docs/seed/SeedSalesApp_Instructions24-25.pdf)
- [SF Treasurer & Tax Collector — Register a Business](https://sftreasurer.org/business/register-business)
- [SF Treasurer & Tax Collector — Renewal Instructions 25-26](https://sftreasurer.org/business-registration-renewal-instructions-2025-2026)
- [SF Business Property Statement (571-L)](https://www.sf.gov/file-your-business-property-statement)
- [SF Business Personal Property FAQs](https://www.sf.gov/information--business-personal-property-frequently-asked-questions)