Earlier today the California Senate voted and passed their latest version of the California Internet Sales tax. ABX8-8 was amended by the Senate to include provisions similar to the laws passed in New York, North Carolina and Rhode Island. It is also similar to the bills pending in several other states including Illinois, Vermont and Virginia. These provisions could require out of state merchants to collect and remit the sales and use tax on sales to California residents.
The history of this bill is complicated and the fast tracking further complicates the issue. AB8 was originally a bill passed in the Assembly and then sent to Senate. When first introduced the bill’s purpose was to address the financial emergency declared by the Governor. When it moved to the Senate they added the amendments; so it now goes back to the Assembly for another vote. I am unsure if it will need to go through three readings or just a concurrence vote. We will know more once the Assembly meets or the Calendar is posted. If passed it will move on to the Governor. If you recall the Governor vetoed the California Internet sales tax legislation last year (AB178). Since the economy in California is still in very dire shape it is unclear what the Governor will do this year.
Much like last years version, ABX8-8 includes a $10,000 sales threshold (in previous 4 quarters).
(5) (A) Any retailer entering into an agreement or agreements under which a person or persons in this state, for a commission or other consideration, directly or indirectly refers potential purchasers of tangible personal property to the retailer, whether by a link or an Internet Web site or otherwise, provided that the total cumulative sales price from all of the retailer’s sales of tangible personal property to purchasers in this state that are referred pursuant to all of those agreements with a person or persons in this state, within the preceding 12 months, is in excess of ten thousand dollars ($10,000).
We will continue to monitor the situation. It is clear this bill along with others, is being fast tracked. The Assembly will be meeting again on Monday, we will then have a better idea of the schedule.
Link to California Bill ABX8-8 including the California Internet Sales Tax
Articles of Interest
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