California has a set of new online sales tax standards. All businesses with an e-commerce arm should familiarize themselves with the new law. Questions? Get in touch. We’ll walk you through it.
South Dakota v. Wayfair: The New Age of Online Sales Tax
Last year, the Supreme Court of the United States handed down a monumental ruling in South Dakota v. Wayfair. The bench eradicated the longstanding “nexus tax” standard, which bound only businesses with a physical presence in a state to sales tax obligations. Because of the ruling, states can now saddle out-of-state vendors with online sales taxes.
Many saw the change as a necessary equalizer in the Age of E-commerce.
California’s New Online Sales Tax for Remote Sellers
Since the ruling, several states pounced on the opportunity to generate income by implementing online sales and use taxes. Last week, California’s e-commerce levy became official when Assembly Bill 147 went into effect. The new statute imposes a tax on remote sellers that annually enjoy more than $500,000 in sales to California residents.
According to the new California online sales tax statute, any “retailer that, in the preceding calendar year of the current calendar year, has total combined sales of tangible personal property for delivery in this state by the retailer and all persons related to the retailer that exceed five hundred thousand dollars ($500,000).” In other words, if your e-commerce business sells $500,000 or more to Californians in a given year, then you must remit sales tax to the state.
To read the new in its entirety, click here.
Connect with an Online Tax Attorney
California’s new online sales tax goes into effect immediately. Moreover, it’s not the only state with new “Amazon tax” laws. If you run an online retail business or have an e-commerce component to your business, now is the time to re-evaluate your tax obligations and positioning.
You May Also Be Interested In:
Three-Minute Guide to E-commerce Taxes: Starting a new e-commerce business? Looking to make your side hobby a legitimate business? Start here for a three-minute overview of e-commerce tax matters. Read »
Seminal E-commerce SCOTUS Case: California’s new online sales tax law stems from the United States Supreme Court’s ruling in South Dakota v. Wayfair. For an easy-to-understand overview of that seminal e-commerce case, catch up with our summary. Read »
Uncle Sam Gives Online Sales Information to States: Yes, the federal government hands over information to states with online sales and use taxes. If you haven’t reviewed your online sales tax compliance in a few years, now is the time. Read »
E-commerce Legal Myths: A lot of misinformation gets passed around the Web. In this post, we quickly debunk three e-commerce legal myths. Read »