CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. California Brings Out-Of-State Retailers Within Sales Tax Scope

California Brings Out-Of-State Retailers Within Sales Tax Scope

by Mike Godfrey, Tax-News.com, Washington

10 May 2019


California's Governor, Gavin Newsom, has signed into law provision to add a sales tax collection obligation on out-of-state retailers whose annual sales in California exceed USD500,000 in any year.

The obligation begins starting October 1, 2019. The regime features a higher de minimis threshold than previously proposed of USD100,000.

The introduction of the new tax collection obligation follows the ruling in Wayfair, in which the US Supreme Court overturned existing case law in ruling that a state can collect sales tax on remote sales even when the vendor does not have a physical presence in the state.

In so doing, the Supreme Court overturned the pre-internet Quill decision of 1992, which held that states cannot force sales tax collection obligation on vendors who do not have personnel or property in the state (the "physical presence" standard).

In examining the constitutionality of a South Dakota sales tax law that requires collection of the state's sales tax by internet vendors with at least 200 transactions or USD100,000 in sales to South Dakota residents, the court observed that physical presence "is not necessary to create a substantial nexus."

It also said that it is no longer possible to defend the physical presence requirement from the point of view that its removal would create undue administrative burdens on out-of-state vendors and disrupt inter-state commerce, given the technology that makes remote online sales possible.

TAGS: court | tax | sales tax | mining | commerce | law | internet | United States | retail

To see today's news, click here.

 















Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »