CA Implements Wayfair Sales Tax Decision

Another important deadline will make an entrance in April next year. Effective April 1, 2019, the California Department of Tax and Fee Administration (CDTFA) will implement the U.S. Supreme Court decision in South Dakota v. Wayfair and require certain out-of-state retailers to collect and remit sales tax to the State of California.

The April 1 deadline requires retailers outside of California to register with the CDTFA, collect California use tax and pay the required tax amount based on sales into California. To date, the statewide sales and use tax base rate in California is 7.25 percent, which includes state tax. However, the CDTFA will apply both state and district taxes to required collections, where the sales and use tax rate may be higher in areas where there are voter-approved district taxes.

Even if the retailer has no physical presence in California, the new collection requirement applies to any retailer if their sales of tangible personal property exceed $100,000 or if they made 200 or more separate transactions in the current or preceding calendar year.

If a business delivers tangible goods into California through the Internet, mail-order catalogs, telephone or any other means, the new economic nexus thresholds apply. The new use tax collection requirement is not retroactive and only applies to sales on or after April 1, 2019.

To learn more about the South Dakota V. Wayfair court case and its outcome, please refer to Court Overturns Physical Presence Standard in Sales Tax Decision on our blog page.

For questions concerning the new collection requirements, please contact me at ecole@bpw.com or (805) 963-7811.