California Sales Tax Filing Update September 2019
What's changing in California?
California has passed a law requiring Marketplaces to collect and remit sales tax on sales facilitated through the marketplace effective October 1, 2019.
- Amazon, eBay, Etsy and Walmart will begin this collection on October 1, 2019.
- You can view the state's guidance document here.
How does this affect me?
If you sell through a Marketplace that has agreed to begin collection in this state, you will see sales tax collected in California for sales on and after October 1, 2019 on your TaxJar Dashboard and on your California Transactions page.
- If you have never set up a filing frequency for California in your account's State Settings, our system will default the state to a monthly frequency and due date on your Dashboard after we see tax collected there. (We default to a monthly frequency and due date if you haven't yet adjusted any frequencies on your end, but the state itself would ultimately determine your exact filing frequency.)
- If you are currently opted in to receive email reminders for your sales tax due dates, you'll also see California listed as a state where you have an upcoming monthly return due in those emails.
I've never registered for a California sales tax license. Do I need to register for a sales tax license in Califonia now?
If you are engaged in business in this state under Revenue and Taxation Code section 6203 and you have a sufficient physical presence in California or economic nexus with California, then you will need to register for a sales tax license.
- Please note, if you’re out of state and your only physical presence in the state is inventory in the marketplace facilitator warehouse and all of your sales are through the facilitator then registration is not required.
- If you do not have a physical presence in California, and as a remote seller exceed $500,000 in gross sales to California including marketplace sales, you are required to register.
- If you've imported your sales across all platforms into your TaxJar account, you can determine if you have economic nexus in the state by running the Sales & Transactions Checker.
- If you do not meet any of the criteria that creates nexus in California, you won't need to register for a sales tax license in this state.
I have already registered for a license in California but and all of my sales are Marketplace-only sales. Should I cancel my existing registration?
If your only sales are marketplace sales, then registration may not be necessary.
- It is up to the taxpayer if the account should be closed. Please contact CA Department of Tax and Fee Administration directly for further assistance.
Do I need to collect taxes on my Califonia sales on other platforms?
Yes, if you have nexus in the state (physical or economic) and you make sales to customers in California on platforms outside of the marketplace that is automatically collecting and remitting, you will also need to collect tax on your end on the California orders that are processed on the other platforms.
Do I still need to file returns in California?
I still need to file returns in California. How do I do this without paying double tax on the sales that were collected and remitted by my Marketplace?
Then, enter the Marketplace sales as "other deductions" using the "other" selection. Finally, enter the description "Sales through marketplace facilitator":
- If you're enrolled in AutoFile for California, our system will handle the Marketplace sales deduction process automatically.
How does this affect my TaxJar Report for California?
Your California Sales Tax Report will be updated in November 2019 (when returns for sales after October 1, 2019 are due) to specifically reflect sales that had tax collected and remitted by Marketplaces that are supported as Marketplace Facilitators in TaxJar Reports.
- These changes will be similar to the Report updates for other states where the Marketplace Facilitator collects tax automatically.