California will require out-of-state retailers to collect tax on sales to state residents beginning April 1, 2019.
“Today ‘s announcement does not increase or create any tax,” California Department of Tax and Fee Administration Director Nick Maduros said this week. “Rather, California will now require more out-of-state retailers to collect and remit taxes just as brick-and-mortar retailers have done for decades. With the Supreme Court ‘s decision in Wayfair, California is able to help level the playing field for California businesses.”
The new collection requirement is not retroactive and applies only to sales made on and after April 1, 2019. It applies if, during the preceding or current calendar year, the retailer ‘s sales for delivery into California exceed $100,000 or the retailer makes sales for delivery into California in 200 or more separate transactions.
Currently, the state only collects sales taxes from online retailers if they have a physical presence, such as offices or warehouses, in California.
More action may be coming. Fiona Ma, California’s state treasurer-elect, told Yahoo Finance this month that she wants Amazon to collect sales tax on behalf of third-party businesses selling products on its website.
“They should be doing the right thing. We have asked them to do it, but they don’t want to do it. So we’re going to compel them next year,” she said.