California – Special Notice – New Use Tax Collection Requirements for Out-of-State Retailers Based on Sales into California Effective April 1, 2019

Beginning April 1, 2019, a retailer located outside of California is required to collect use tax if, during the preceding or current calendar year:

  • The retailer’s sales into California exceed $100,000, or
  • The retailer made sales into California in two hundred (200) or more separate transactions.

An out-of-state retailer reaching either of the above sales thresholds is engaged in business in California pursuant to Revenue and Taxation Code section 6203 and the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc. (Dock. No. 17-494) (Wayfair). A retailer engaged in business in this state is required to collect California use tax from its customers on the retailer’s taxable sales of tangible personal property into California and pay the tax to the California Department of Tax and Fee Administration (CDTFA).

This new use tax collection requirement is not retroactive; it applies only to sales on and after April 1, 2019. This requirement applies to retailers that sell tangible goods for delivery into California through the Internet, mail-order catalogs, telephone, or any other means.

For More Information: SPECIAL NOTICE/DECEMBER 2018/L-565

California Department of Tax and Fee Administration