California Secondhand Dealer License Requirements, Explained

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Last updated: August 13, 2026 · By Gold California Editorial

The phrase "licensed gold buyer" gets used loosely in California. Some buyers hold a local secondhand dealer license from the chief of police or sheriff. Others fall into a separate coin dealer carve-out. Many hold none of that but still need a CDTFA seller's permit, a business license, and possibly a federal anti-money-laundering program. This page maps every regime a consumer might see, and tells you what you can actually verify.

Why the secondhand dealer license is local, not statewide

The California rules for secondhand dealers live in the Business and Professions Code, sections 21625 through 21647. Section 21625 says the intent of the article is to curtail the dissemination of stolen property and to run a uniform statewide reporting program (source: California BPC section 21625).

The uniform program is statewide, but the license itself is not. BPC section 21641(a) puts the licensing authority in the hands of the chief of police, the sheriff, or where appropriate a police commission. Applications go to the local law-enforcement authority, which then forwards them to the California Department of Justice for review (source: California BPC section 21641).

The Department of Justice review has a 30-day clock under BPC section 21641(a). If DOJ does not comment within 30 days, the local authority may grant the license. A statutory disqualifier applies. An applicant convicted of receiving stolen property or a related theft offense cannot be licensed. Fees flow through the local authority, with a DOJ portion set by BPC section 21642.5 and an optional local processing fee.

Two takeaways matter for a consumer. First, there is no single state database of secondhand dealer licenses to check. You verify with the city or county where the buyer operates. Second, this article of the code is preemptive. BPC section 21625 states the article shall not be superseded or supplanted by any city or county ordinance, so local rules cannot rewrite the statewide scheme.

How the coin and bullion carve-out works

The California definition of "secondhand dealer" starts broad and then carves out coin dealers. BPC section 21626(a) defines a secondhand dealer as any person, partnership, firm, or corporation whose business includes buying, selling, trading, taking in pawn, or accepting for consignment or auction of secondhand tangible personal property (source: California BPC section 21626).

The same section explicitly excludes a "coin dealer" from that definition. BPC section 21626(b) defines a coin dealer as any person, firm, partnership, or corporation whose principal business is the buying, selling, and trading of coins, monetized bullion, or commercial grade ingots of gold, silver, or other precious metals.

The word "principal" matters. A jewelry shop that occasionally buys a gold Krugerrand is not a coin dealer under section 21626(b); its principal business is jewelry, so the standard secondhand dealer regime applies. A dedicated bullion shop that also stocks a few silver jewelry pieces likely is a coin dealer, because its principal business is coins and ingots.

BPC section 21626.5 adds two other narrow carve-outs from the secondhand dealer definition. One is for a person who performs the services of an auctioneer for a fee or salary. The other is for a business limited to reconditioning and selling major household appliances, subject to strict conditions (source: California BPC section 21626.5). Neither carve-out reaches the gold trade in ordinary practice.

The four regimes a California gold buyer may need

A gold buyer in California can operate under any combination of four overlapping regimes. Each regime has its own trigger, its own regulator, and its own verifiable footprint. The table below maps the four.

Sources: California Business and Professions Code sections 21626, 21628, 21641; California Department of Tax and Fee Administration, Permits and Licenses; 31 CFR 1027.100 (definition of dealer) via Cornell Legal Information Institute. Checked August 2026.

A single business often sits inside three or four of these regimes at once. A shop that buys bullion for cash and takes in silver jewelry on the side may hold a local secondhand dealer license, file coin dealer reports, keep a CDTFA seller's permit, and run a federal AML program. A backyard operation buying scrap gold from Craigslist likely holds none of them and is operating outside the law.

A local business license or business tax certificate is a fifth requirement in most California cities. It is not a substitute for any of the four above; it is a general business registration issued by the city or county finance department, and it does not vouch for compliance with the secondhand dealer or coin dealer rules.

What a consumer can actually check

You cannot audit a gold buyer the way the DOJ does. You can, however, ask a short list of verifiable questions before you hand over metal. The steps below outline what a careful California seller does when a shop or online buyer is unfamiliar.

1. Ask the buyer to name their regulator category. Is the shop a secondhand dealer under BPC section 21641, a coin dealer under BPC section 21626(b), or both? A buyer who cannot answer that question is a warning sign.
2. Ask for the local secondhand dealer license number, if the shop takes in jewelry, watches, or scrap. Call the issuing chief of police, sheriff, or police commission to confirm the license is active.
3. Ask which local law-enforcement agency receives the shop's coin dealer reports. BPC section 21628(d)(6) sends coin dealer reports to the chief of police or sheriff by fax or mail.
4. Ask for the CDTFA seller's permit number. California requires a seller's permit for every retailer of tangible personal property; verify the number at CDTFA's online services page.
5. Ask whether the business has a written AML program under 31 CFR 1027.210. The 50,000-dollar threshold at 31 CFR 1027.100 is annual, not per-transaction; most volume buyers will have one.
6. Ask for the local business license or business tax certificate. This is city or county issued and confirms the shop is a registered business in that jurisdiction.
7. Confirm the buyer will produce a receipt and ID request that matches state rules. BPC section 21628(e) requires the buyer to record and hold specified identification and, for secondhand transactions, a fingerprint of the seller.
8. Walk away from a buyer who resists any of the above. A legitimate operator can produce every one of these items in a few minutes; a reluctant one is telling you something.

What to think when a dealer says "I don't need a license"

Some California gold buyers correctly say they do not need a secondhand dealer license. In almost every legitimate case, the reason is the coin dealer carve-out at BPC section 21626(b). Their principal business is coins, monetized bullion, and commercial grade ingots, which are not "secondhand tangible personal property" under the article once you read the definition carefully.

That does not mean the coin dealer operates unregulated. Three obligations remain in place. Coin dealers file transaction reports under BPC section 21628(d)(6) on a form set by the Attorney General, sent by fax or mail to the local chief of police or sheriff. Coin dealers record identification and take a fingerprint from the seller under BPC section 21628(e). And a coin dealer that fails to comply with BPC section 21628 loses the peace-officer hold protections at BPC section 21647(a)(2)(G).

Where a buyer says "I don't need a license" but cannot describe how they report acquisitions to law enforcement, treat that as a red flag. The carve-out from the secondhand dealer license is not a carve-out from state supervision. A shop that skips coin dealer reporting is operating outside the statute, whether or not the owner realizes it.

The same test applies to online-only buyers who mail you a check. If the business ships items across state lines, it may be a "dealer" under 31 CFR 1027.100 and required to run a federal AML program. The federal rule uses a 50,000-dollar annual purchase and 50,000-dollar annual gross-proceeds test (source: 31 CFR 1027.100 via Cornell Legal Information Institute).

Reporting duties still apply to coin dealers

The California legislature wrote the coin dealer carve-out with an explicit reporting duty attached. BPC section 21628(a) requires every secondhand dealer or coin dealer described in section 21626 to report daily, or no later than the next business day, all secondhand tangible personal property acquired (source: California BPC section 21628).

Reports include a property description, a serial number where applicable, any personalized inscriptions, and the seller's identification. The identification standard at BPC section 21628(e) accepts a state driver's license, a state identification card, a United States passport, or several other listed documents; the buyer must also collect a legible fingerprint from the seller.

Two features of section 21628 matter for coin dealers specifically. First, BPC section 21628(d)(6) allows coin dealers to report by facsimile or mail to the chief of police or sheriff on a form developed by the Attorney General, rather than through the California Pawn and Secondhand Dealer System (CAPSS). Second, section 21628 defines "item" narrowly, so a paired set counts as one item, but individual coins are individual items.

These reporting rules apply even when the coin dealer carve-out means no secondhand dealer license is required. A buyer who does not know how they report to law enforcement is a buyer who is not complying with section 21628, and the practical protections of section 21647 (peace-officer holds) may not apply to their inventory.

Who this page is not for

This page orients a consumer or small operator. It is not a step-by-step guide to becoming a licensed secondhand dealer or coin dealer in California. If you are opening a shop, the local city or county law-enforcement agency issues the license, and the California Department of Justice sets the application forms and the fee under BPC sections 21641 and 21642.5. Talk to the local licensing officer and a California business attorney.

This page is also not tax or legal advice. Federal AML rules, state seller's permit rules, and city or county business license requirements have their own thresholds and definitions. A small operator should confirm every requirement with the relevant regulator before opening for business, and a consumer with a large sale should confirm with the buyer that all four regimes are covered.

Common questions California sellers ask

Is there a statewide California secondhand dealer license?

No. The license is local, issued by the chief of police, sheriff, or where authorized a police commission under BPC section 21641(a). The Department of Justice reviews every application for 30 days before the local authority may grant the license, but DOJ does not issue licenses itself. There is no single statewide directory of licensees to search.

Does a California coin shop need a secondhand dealer license?

Not automatically. BPC section 21626(b) carves out a "coin dealer" whose principal business is buying, selling, and trading coins, monetized bullion, or commercial grade ingots of gold, silver, or other precious metals. That business is regulated as a coin dealer under sections 21628 and 21641, but it is not defined as a secondhand dealer under section 21626(a).

If a coin dealer does not need a secondhand dealer license, what do they need?

A coin dealer typically holds a CDTFA seller's permit, reports acquisitions to the local chief of police or sheriff under BPC section 21628(d)(6), and keeps seller identification and a fingerprint under section 21628(e). Most cities also require a local business license. If annual purchases and gross proceeds each exceed 50,000 U.S. dollars, the dealer must run a written AML program under 31 CFR 1027.210.

Who enforces the California secondhand dealer article?

The California Department of Justice sets the license application forms, reviews applications for 30 days under BPC section 21641(a), and operates the California Pawn and Secondhand Dealer System (CAPSS) referenced in BPC section 21628. The local chief of police, sheriff, or police commission grants licenses and receives coin dealer transaction reports. A willful violation of the article is a misdemeanor under BPC section 21645.

Does the FinCEN 50,000-dollar rule apply to my one-time gold sale?

The 50,000-dollar threshold in 31 CFR 1027.100 applies to the buyer, not to you. It measures the buyer's annual precious metals purchases and annual gross proceeds. A one-time sale of your grandmother's coins does not trigger the rule for you as the seller; it may, however, be an ordinary transaction under a buyer's existing AML program.

Can a local ordinance require more than the state statute?

BPC section 21625 states that the article shall not be superseded or supplanted by any city, county, or city and county ordinance. Cities and counties may still require a separate general business license or business tax certificate under their own home-rule authority, but they cannot rewrite the state secondhand dealer scheme itself.

What happens if a buyer does not report a coin transaction to the sheriff?

A coin dealer that fails to file the section 21628 report is out of compliance with the statute. Practically, BPC section 21647(a)(2)(G) states that the 90-day peace-officer hold protections do not apply to items found in the possession of an unlicensed or non-reporting dealer, which exposes that dealer's inventory to seizure. A willful violation of the article is a misdemeanor under section 21645.

Where do I file a complaint about a California gold buyer?

The California Department of Financial Protection and Innovation accepts complaints online at dfpi.ca.gov. The California Attorney General accepts consumer complaints at oag.ca.gov. For federal jurisdiction over investment fraud in precious metals contracts, the Commodity Futures Trading Commission takes tips and complaints at cftc.gov. Keep your receipts and any recorded pitch when you file.