California Offers Relief for Qualifying Out-of-State Retailers Selling Through Fulfillment Centers

The California Department of Tax and Fee Administration (CDTFA) recently announced it is offering relief to certain out-of-state retailers (referred to as "marketplace sellers") who are considered to be engaged in business in the state of California based solely on their use of in-state fulfillment centers to store inventory. Qualifying retailers may be entitled to reduced tax liabilities, penalties, and interest, effective June 27, 2019.

Retailers must meet all of the following conditions to qualify:

  1. Did not register with the CDTFA for sales and use tax purposes prior to December 1, 2018;
  2. Did not file sales or use tax returns, or makes sales or use tax payments, prior to being contacted by the CDTFA;
  3. Voluntarily registered with the CDTFA and, by September 25, 2019, filed completed tax returns for all relevant periods and paid in full or made arrangements for a payment plan; and
  4. Are considered to be engaged in business in the state of California based solely on the use of a marketplace facilitator (such as a fulfillment center).

To read the CDTFA's special notice on this relief, click here.

To discuss your California sales and use tax compliance, contact one of our attorneys today.

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