California Legislation Would Require Notification to Online Purchasers

If enacted, recently passed California legislation would require retailers, who are not required to collect use tax, to provide notification on their retail Internet Web site or catalogue that tax is imposed on the storage, use, or other consumption in California of tangible personal property purchased from the retailer that is not exempt, and is required to be paid by the purchaser. Amendments to the bill over the last few months have eliminated but then returned the rebuttable presumption that any retailer that is part of a controlled group of corporations, and that controlled group of corporations has a component member that is a retailer engaged in business in California, is presumed to be a retailer engaged in business in the State. The original bill included a provision that requires every person who is not registered with the California Board of Equalization (BOE), who sells tangible personal property, the storage, use, or other consumption of which is subject to use tax, to file a use tax report with the BOE. However, at this time, this provision has been eliminated. If passed, this bill would be effective January 1, 2011. (A.B. 2078, passed by the California Assembly on May 6, 2010, Amended June 16, 2010 and June 24, 2010). (08/10)

Posted on August 23, 2010