California – TAX INFORMATION BULLETIN – September: New California Law Changes Use Tax Collection Requirements for Remote Sellers and New District Use Tax Collection Requirements for All Retailers


On April 25, 2019, Governor Newsom signed Assembly Bill No. (AB) 147 (Stats. 2019, ch. 5) which requires out-of-state retailers with no physical presence in California (remote sellers) to collect use tax if, during the preceding or current calendar year, the total combined sales of tangible personal property for delivery in California by the retailer and all persons related to the retailer¹ exceed $500,000.

AB 147 also requires all retailers, whether located inside or outside California, to collect and pay the district use tax on all sales made for delivery in any district that imposes a district tax if, during the preceding or current calendar year, the total combined sales of tangible personal property in California or for delivery in California by the retailer and all persons related to the retailer exceed $500,000. In other words, any retailer whose total sales of tangible personal property in California, including sales for resale, exceed the $500,000 threshold is considered engaged in business in every district in California that imposes a district tax and is, therefore, required to collect the district use tax on taxable sales made for delivery in every taxing district, regardless of the amount of the retailer’s sales to any individual district.

The new state use tax collection requirement is operative April 1, 2019. The new district use tax collection requirement is operative April 25, 2019.* For more information, please see our Special Notice, New Use Tax Collection Requirements for Remote Sellers and New District Use Tax Collection Requirements for All Retailers – Operative April 1, 2019, at Special Notice L632 and our online guide, Use Tax Collection Requirements Based on Sales into California Due to the Wayfair Decision at http://www.cdtfa.ca.gov/industry/wayfair.htm


To read the full Tax Information Bulletin Pub 388 click HERE