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California announces 2019 use tax collection requirements for out-of-state retailers

Beginning April 1, 2019, retailers located outside of California are required to register with the California Department of Tax and Fee Administration (CDTFA), collect the California use tax, and pay the tax to the CDTFA based on the amount of their sales into California, even if they do not have a physical presence in the state. The new collection requirement applies to a retailer 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.

The new collection requirement is pursuant to Revenue and Taxation Code (RTC) section 6203 (section 6203) (Stats. 2011, ch. 313, § 3) and the U.S. Supreme Court's June 21, 2018, decision in South Dakota v. Wayfair, Inc. (Wayfair) (Dock. No. 17-494).

The new collection requirement will apply to taxable sales of tangible personal property to California consumers on and after April 1, 2019, and is not retroactive. Retailers reaching either of the above sales thresholds are now required to register with the CDTFA to collect the California use tax even if they were not previously required to register. These retailers include retailers that sell tangible goods for delivery into California through the Internet, mail-order catalogs, telephone, or any other means.

For more information on California’s new use tax collection requirements, visit the CDTFA guide for out-of-state retailers

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Judy Vorndran can be reached at jvorndran@taxops.com or 720.227.0093. Follow Judy on LinkedIn.

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Specialties: #usetax, #California, #collection