2 ms·

>It doesn't matter that it has never been tested in court--it's been generally accepted law in the US for decades (predating Quill) and it would take a court ru

by ikeboy 8y ago

>It doesn't matter that it has never been tested in court--it's been generally accepted law in the US for decades (predating Quill) and it would take a court ruling for it to be otherwise. The issue is there are arguments on both sides how to apply the general accepted law. Do you treat it as seller owned inventory, or do you treat it as consignment? Does commingled inventory belong to a seller, and if so, at what point does title transfer if the seller has not had a sale? If two people send inventory to Amazon, it's commingled, and Amazon stores one of the units in California, which seller has physical nexus? Taking California's position on these legal questions may be the pragmatic approach if someone wants to avoid legal risk, but it's by no means clear that they're right under established law. You're entitled to your legal opinion, but so are others, and other tax lawyers have weighed in and believe California's argument is incorrect here. Given that the issue hasn't been decided in court and there are lawyers arguing both ways I don't think it's right to say that clearly one side is right.

MaureenS 8y ago
That's correct, ikeboy. Also, when California imposed a state sales/use tax collection obligation (effective April 1) on out-of-state sellers with more than $100,000 in sales or at least 200 transactions in the state in the current or preceding calendar year, it also required in-state and out-of-state sellers to collect and remit district sales/use tax in any district where they surpassed the $100,000 sales/200 transactions threshold. Here's the clincher that has created a real headache for a lot of sellers. The law that was enacted April 25 retroactively supersedes the previous April 1 rule. So, as of April 1, the transaction threshold is eliminated, and the sales threshold is now increased to $500,000. The new law also eliminates the need to track sales in each district. And, starting October 1, 2019, it requires marketplace facilitators to collect sales/use tax on behalf of third-party sellers. To be fair, the changes adopted by the legislature should make sales tax compliance a bit simpler for in-state and out-of-state sellers alike. While many businesses are undoubtedly pleased with the new policy, the fact that California adopted one set of rules/requirements as of April 1, changed them weeks later (as of April 25), and set more changes for the not-too-distant future is frustrating.

by ikeboy 8y ago

MaureenS 8y ago

That's correct, ikeboy. Also, when California imposed a state sales/use tax collection obligation (effective April 1) on out-of-state sellers with more than $100,000 in sales or at least 200 transactions in the state in the current or preceding calendar year, it also required in-state and out-of-state sellers to collect and remit district sales/use tax in any district where they surpassed the $100,000 sales/200 transactions threshold. Here's the clincher that has created a real headache for a lot of sellers. The law that was enacted April 25 retroactively supersedes the previous April 1 rule. So, as of April 1, the transaction threshold is eliminated, and the sales threshold is now increased to $500,000. The new law also eliminates the need to track sales in each district. And, starting October 1, 2019, it requires marketplace facilitators to collect sales/use tax on behalf of third-party sellers. To be fair, the changes adopted by the legislature should make sales tax compliance a bit simpler for in-state and out-of-state sellers alike. While many businesses are undoubtedly pleased with the new policy, the fact that California adopted one set of rules/requirements as of April 1, changed them weeks later (as of April 25), and set more changes for the not-too-distant future is frustrating.