California – Use Tax Collection Requirements Based on Sales into California Due to the Wayfair Decision

Last year on April 25, 2019, California passed Assembly Bill No. (AB) 147. AB 147 amended Revenue and Taxation Code (RTC) section 6203 to require retailers located outside of California (remote sellers, including foreign sellers located outside of the United States) to register with the CDTFA and collect California use tax if the total combined sales of tangible personal property for delivery in California by the retailer and all persons related to the retailer exceed $500,000 for the year. 

IMPORTANT NOTE – The requirements to register and collect California use tax prior to AB 147 remain in effect. That is, retailers with a physical presence in California are still generally required to be registered with the CDTFA. Examples of a physical presence in this state include, but are not limited to:

  • Maintaining inventory or office locations in California.
  • Having representatives in California for purposes of taking orders, making sales or deliveries, or installing or assembling tangible personal property.
  • Leasing equipment, including a computer server in California.

AB 147 also amended RTC section 7262 to require all retailers, whether located inside or outside of California, to collect district use tax on all sales made for delivery in any district that imposes a district tax. 

Please see the General Info and Collection Requirements section for additional information about district tax and the new district use tax collection requirement.

To assist remote sellers in determining the application of tax to many items and transactions, please see our California Tax Matrix for Remote Sellers.

For more information visit:

California department of tax and fee administration
April 2020