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On April 27, 2017, a bipartisan group of senators introduced the Marketplace Fairness Act of 2017 (MFA). Similar legislation was introduced in both 2013 and 2015 and failed to be enacted both times. If enacted, the legislation would authorize states meeting certain requirements to require remote sellers that do not meet a "small seller exception" to collect their state and local sales and use taxes. The small seller exception is set again at $1 million of remote sales annually. The only other significant change from the 2015 version is a prohibition of making the effective date during the 4th quarter of the calendar year. For information on the previous versions of the bill, visit Senate Introduces Marketplace Fairness Act of 2015.  

 

On April 27, 2017, a bipartisan group of lawmakers introduced the Remote Transactions Parity Act (RTPA) of 2017. Similar legislation was introduced in 2015 but failed to be enacted. Like the MFA, the legislation would also create sales and use tax collection obligations for remote sellers, but has some differences and additional provisions. Some key differences from the Marketplace Fairness Act include a different definition of a small seller.  The RTPA has a phased in threshold starting at $10million in year one, then $5million, then $1million.  In year 4, there is no threshold.  In addition to the monetary thresholds, any seller that sells on an electronic marketplace is considered a small seller.  A difference from the 2015 version of the bill is an inclusion of a definition of remote seller which specifies when a company is NOT a remote seller which includes physical presences for more than 15 days in a state, leasing or owning real property and using an agent to establish or maintain the market in a state if the agent does not perform business services in the state for any other person during the taxable year.  For more information on the Remote Transaction Parity Act of 2015, visit House Introduces Remote Transactions Parity Act of 2015. (Marketplace Fairness Act of 2017, Remote Transactions Parity Act of 2017)

(05/04/2017)

Effective April 1, 2017, California has enacted a $1.00 California battery fee on the purchase of a replacement lead-acid battery and a $1.00 manufacturer battery fee on the sale of a lead-acid battery to a dealer, wholesaler, distributor or other person in the state. On April 1, 2022, the California battery fee will increase to $2.00. The manufacturer battery fee will end on March 31, 2022. 

 

A lead-acid battery, the type commonly found in vehicles, is a battery weighing more than five kilograms (about 11 pounds), primarily composed of both lead and sulfuric acid (liquid, solid, or gel), with a capacity of six or more volts, that is used as: 

 

  • A starting battery for delivering a high burst of energy to start an internal combustion engine,
  • A motive power battery to provide the power for propulsion of a vehicle, including watercraft,
  • A stationary storage or standby battery to be used in a system where the battery acts as electrical storage or a source of emergency or backup power, or
  • A source of auxiliary power to support the electrical systems in a vehicle 

 

For the California battery fee, dealers may retain 1.5% of the fee as reimbursement for costs associated with collection of the fee. Dealers must charge a refundable deposit, subject to sales tax, when a consumer purchases a replacement lead-acid battery and does not simultaneously provide a used lead-acid battery to the dealer. Dealers are required to state the fee and refundable deposit on the invoice for all sales of replacement lead-acid batteries. Dealers also must post a written notice of the fee. 

 

Dealers and manufacturers are required to register, report electronically, and pay the fees to the California State Board of Equalization (BOE).Certain exemptions and exclusions apply to the California battery fee. For more information, visit the California State BOE webpage. (Special Notice L-489, California State Board of Equalization, February 2017)

(03/13/2017)

California has approved an increase in the electronic waste recycling (eWaste) fee rates for all covered electronic devices (CEDs). Effective January 1, 2017, the eWaste fee increases for all CEDs. The new rates are: for a screen size of more than 4 inches, but less than 15 inches, the fee is $5; for a screen size of 15 inches or more, but less than 35 inches, the fee is $6; and for a screen size of 35 inches of more, the fee is $7. The eWaste fee is remitted to the Board of Equalization.  (Tax Information Bulletin, California State Board of Equalization, December 2016)

(01/03/2017)

On November 8, 2016, four jurisdictions in California and Colorado approved “soda taxes” through ballot measure. San Francisco, Oakland, and Albany, CA each approved “soda taxes” in the amount of one-cent per ounce. Boulder, CO approved a tax in the amount of two-cents per ounce. On November 10, 2016, the County Board in Cook County, IL (which includes Chicago) approved a tax in the amount of one-cent per ounce. It should be noted that Chicago, IL has imposed a 3% soft drink tax since 1993. These jurisdictions join Berkeley, CA and Philadelphia, PA, which have also adopted soda taxes.

(12/04/2016)

On January 1, 2017, California’s state sales and use tax rate will decrease 0.25% from 7.5% to 7.25%. Note that this rate includes the statewide county tax of 1.25%, so the true California state sales and use tax rate is decreasing from 6.25% to 6%. The state had implemented a temporary sales tax rate increase of 0.25% from January 1, 2013 through December 31, 2016. The lower rate applies for sales that occur after January 1, 2017.  This is deemed to be date of delivery unless the contract stipulates that title transfer occurs at an earlier date.  In addition, for fixed rate contracts, the rate reduction applies – even if the contract was entered into prior to the rate change.  This rate change also impacts the partial exemption under the manufacturing provisions.  For additional information on how the rate decrease affects partial exemptions and other items, visit the California BOE webpage. (Special Notice L-475, California State Board of Equalization, October 2016)

(12/04/2016)

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