Legislation Introduced to Change Statutory Definition of “”Retailer Engaged in Business”” in California

A.B. 27 and A.B.178 have been introduced to include in the definition of a “retailer engaged in business in this state” any retailer entering into an agreement with a resident of California under which the resident, for a commission or other consideration, directly or indirectly refers potential customers of tangible personal property, whether by a link or Internet Web site or otherwise, to the retailer, if the cumulative gross receipts from sales to customers referred pursuant to these agreements is in excess of ten thousand dollars during the preceding four calendar quarters. If the retailer can demonstrate that during the four quarters in question, the resident did not engage in referrals in California on behalf of the retailer that would satisfy the requirements of the United States Constitution commerce clause, the proposed new definition is inapplicable to the retailer.

Additionally, A.B. 27 also seeks to include in the definition any retailer who has any representative, agent, salesperson, canvasser, independent contractor, or solicitor servicing or repairing tangible personal property in California under the authority of the retailer. (A.B. 27 as introduced in the third extraordinary session by the California Assembly on January 29, 2009, and A.B. 178, as introduced in the regular session by the California Assembly on February 2, 2009)

Posted on February 18, 2009