The California Department of Tax and Fee Administration (CDTFA) recently issued a special notice updating out-of-state e-retailers regarding their sales and use tax obligations for products delivered to California consumers. Specifically, beginning October 1, 2019, it will be the marketplace facilitator, rather than the marketplace seller, who will be responsible for collecting and paying sales and use tax on retail sales.
“Marketplace facilitator” is defined as “a person who contracts with marketplace sellers to facilitate the sale of the marketplace sellers’ products through a marketplace operated by the person or a related person.” A “marketplace seller” is defined as “a person who has an agreement with a marketplace facilitator and makes retail sales of tangible merchandise through a marketplace owned, operated, or controlled by a marketplace facilitator.” Marketplaces can be brick-and-mortar or e-retail sites.
To read the complete special notice, click here.
To discuss your California sales and use tax questions, contact one of our attorneys today.