“Some
reports have suggested that all online sellers must now collect
California sales tax,” said Runner. “That’s a gross overstatement that
creates needless confusion for both taxpayers and consumers.”
“Even
under this new law most major out-of-state online retailers, like L.L.
Bean and Overstock.com, are not required to collect sales tax as long as
they don’t have a presence in California,” added Runner.
The
new law, which became effective September 15, requires out-of-state
sellers to collect tax if they make more than $1 million in annual sales
to California consumers and at least $10,000 of those sales come
through referrals from California-based affiliates.
Earlier
this year the Board of Equalization mailed letters to more than 200
out-of-state retailers notifying them of the new law. To date, only a
handful have responded by beginning to collect sales tax.
When
out-of-state retailers do not collect tax, California consumers are
still required to report and pay the equivalent of sales tax, known as
“use tax.” Consumers can pay directly to the BOE using eReg or pay on their California income tax returns with the option of using BOE’s Use Tax Lookup Table.
