By: Linda L. Goodman
The California Senate last week voted 36-0 to approve the A.B. 147 legislation that would supersede a California regulate for remote sellers that took effect last week. This new bill, A.B. 147 establishes a $500,000 threshold for remote collection and remittance of sales and use tax and also includes a marketplace provision.
The marketplace provision, which affects platform companies like Amazon and eBay, would force the platform companies to collect and remit tax on behalf of vendors that sell on their platforms. This new provision would take effect on October 1, 2019.
The bill is expected to have minor revisions before heading to Gov. Gavin Newsom shortly. And this legislation is tagged as an emergency so that it can take effect immediately upon enactment.
This newest legislation by California is in response to the US Supreme Court’s landmark decision in the South Dakota v. Wayfair case. That decision eliminated the physical presence requirement for mandated collection and remittance of sales and use tax. Many other states were quick to pass legislation after the landmark decision last June.
Last December, the California Department of Tax and Fee Administration (“CDTFA”) issued a notice regarding the Wayfair decision. The department notice said that existing California law gave the department the authority to impose sales and use tax collection on out of state sellers. The department also said it would adopt the same thresholds as South Dakota that were affirmed by the high court.
With this new bill, it made significate changes to the CDTFA decision to add a $500,000 threshold, establishes the marketplace provision, and eliminates the annual 200 separate transactions threshold.
For more information and to view the full bill, go to the State’s website here:
http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201920200AB147
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This article is a publication of The Goodman Law Firm and is intended to provide information on recent legal developments. This article does not create an attorney-client relationship, nor should it be construed as legal advice or an opinion on specific situations. This may constitute “Attorney Advertising” under the Rules of Professional Conduct and under the law of other jurisdictions.
Linda L. Goodman is the founder of The Goodman Law Firm, concentrating its practice in internet business and law. Her firm’s clients include Advertisers, Affiliates, Affiliate Networks, and ISP’s.
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