As of January 1, 2021, Mexican merchants no longer need to register with the California Department of Tax and Fee Administration (CDTFA) for the Mexican Merchant Program. The Mexican Merchant Program was created to provide an easy way for Mexican retailers to buy items for resale from California vendors, and for those vendors to support claimed nontaxable sales for resale. However, it was determined that the program duplicated existing processes for documenting sales for resale.
Now, California vendors should obtain from Mexican retailers the same kind of resale certificate with supporting documentation that they would from any other buyer that intends to resell the property purchased. If a sale to a Mexican buyer does not qualify as a sale for resale, it may qualify as a tax-exempt export to a foreign country. Mexican retailers should experience no changed in the application of tax to their transactions.