California has to be the worst state to live in. They have a surging homeless population, rat infestation, human waste on the streets, and now during this pandemic the most overbearing restrictions, yet they currently still have the highest number of infected. But the mismanagement of the state and these over the top lockdowns have led the state to look for alternate means to find money for their budget. So they are looking outside of their borders and planning to tax businesses that are not even in their state but have benefitted from online sales to Californians. But that’s not even the worst of it they also want to retroactively collect these taxes for the last 8 years.
“As reported in a December 28 Los Angeles Times editorial, the California Department of Tax and Fee Administration (CDTFA), which oversees sales and use tax collections, is trying to retroactively impose sales taxes on out-of-state retailers as far back as 2012.
Prior to 2018’s South Dakota v. Wayfair Supreme Court ruling, states had the power to mandate that companies with a physical presence in their borders collect and remit taxes on sales in the state, even if the products involved came from outside the state. But they could not force companies with no physical presence in the state to do so. Then South Dakota v. Wayfair gave states the power to mandate that companies with no physical presence in their state also pay taxes on sales within their borders if they have a sufficient economic nexus (volume of business, essentially) to the state. California passed such a law in 2019. Since those sellers were only confronted with the law then, in fairness those taxes should only apply afterward.
But the CDTFA has been asserting that out-of-state retailers who sold and shipped through Amazon Fulfillment Services (AFS) now owe back sales taxes from the first date their products were stored in a California Amazon warehouse, even back to 2012, when Amazon was first required to pay California state taxes on its direct sales from out-of-state locations into the state.”
How is this fair? They are going after a business for eight years worth of taxes out of the blue like this. Businesses didn’t sign on to be taxed like this. If I were them I would just ban all future sales to California and refuse to pay any of these outrageous taxes. We are in the middle of a pandemic, businesses are struggling to stay open and California thinks they should be taxed if they sold to Californians in the past 8 years… What a horrible idea.
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