Relief May Be Available to Marketplace Sellers Using Fulfillment Centers in California


#4

We got a letter from them a year ago and we threw it straight in the trash.

We deal with our local revenue officer here in Clark County, and even they do not have our sales data. If they request it, we give it to them, but Amazon for sure is not providing California with anything more than the name and address of sellers.

It’s questionable that their law and attempts to collect taxes from before any law was instituted, would be legal here in Nevada.

They basically sent these things out in the hopes that people would get scared and reply.


#5

Seems like fishing, thought this was dead with the back taxes. I thought the Comptroller of CA wrote a letter to the Governor earlier this year basically stating that the Nexus argument and back taxes was NOT legal.


#6

Yeah that went right into the deleted folder.


#7

I Totally agree with you. This makes no sense. Again, if 500K is the new standard written into law–why would they go after amounts that are less than 500K for that super small window of time of April 2016 to March 2019? Again, the new law says the 500K standard applies to sales in the preceding calendar year or the current calendar year. That would be all of 2018 and Jan - March of 2019–in which is elaborated as being some of the “penalty time frame” for qualified retailers. So the communication isn’t cohesive to the law that was just passed. It would need to say April 2016 thru 2017. But even then–the penalty would be for the laws on the books then–which were unclear. Back then–they defined the issue as to whether or not you had “nexus” or a substancial presence in the state. I didn’t fall into that category either. Hey, we want to be honorable–but we would have expected clear direction on saying a tax is due–when it is has never been clearly defined… They should just start fresh with their new laws. Over 500K going forward…


#8

It’s the same sort of “relief” that a lame horse gets from a bullet to the head.


#9

We call that lead poisoning.


#10

received today too, should I send it to the deleted folder as well?


#11

The more I look at the email and the way it is phrased, it really strikes me as fear mongering; I hate when people try and motivate you to do something out of fear.

I know fear is a powerful motivator but I see too much of it on Amazon these days; it is not a healthy way to get things done, it works but in the short term but longer term it can be disastrous.

Most sellers on Amazon are good, decent people; reach out to us with respect and dignity and most will work with you to find a mutual beneficial solution.


#12

The letter was just a letter. CDTFA is trying to phish for more people to register and pay. This email was less threatening than the letter they sent out last year. Now the language is more of we are doing you a favor. If they would have forgiven some of the back taxes then more people would have taken the bait. The state might not be right about going after people due to so called FBA Nexus but there is no one to stop them. If they want to go after you they will do it until they are stopped. It would take a court case where they lose. California is known for spending $1,000,000 to collect $100. large economy but broke.


#13

Just ignore all letters from California and say you never received anything. That’s by far the worst state in the country for everything and the last thing i’ll ever do is pay taxes to them.


#14

Really? I’ve read many ill informed comments about CA here but this one might be the best/worst ever…site your source because I’d love to learn all about it.


#15

That was my thought exactly.


#16

Reported it as a phishing attempt and moved on


#17

No one should listen to this nonsense. Throw these letters straight in the trash. These state governments are as bad as robocalls or telemarketers with their tactics.


#18

Does anyone know if there are any “laws on the books” that say that a communication to invite someone to pay taxes–has to come in the form of a certified letter? Did this email actually just go into my “spam” folder and I never received it? :grinning:


#19

I believe this is for FBA sellers. The $500K threshold forces marketplaces like Amazon to collect sales tax on behalf of it’s sellers. It’s also for sellers with that level of sales (econiomic nexus) but no physical presence in a non-marketplace environment. For FBA sellers, California considers inventory stored in a warehouse in California as physical nexus. So there is no $500K threshold for FBA sellers.


#20

Does the IRS send you a letter via certified mail every year inviting you to file a return?

In the case of California it’s not just about sales tax. If you register to collect and remit in California you may also be subject to annual Franchise Tax filings and a yearly payment of 1.5% of your annual net profit attributed to sales in the state with a minimum of $800 due each year.


#21

It gets more and more confusing with each state coming up with their own version. We need a federal legislation to override individual state legislations.

As per my understanding the 500K threshold is for remote sellers selling into the state of California from other states. It does not apply to FBA sales from merchandise stored in Amazon’s California warehouses. Those sales constitute Nexus sales per the state of California and both sales tax and income tax will be applicable on those sales.
However, please note that income tax will apply to all those sales, however sales tax will only apply to sales for goods sold within the state of California.

Please correct me!


#22

Most states are using the facilitator model and requiring Amazon to collect and remit taxes; CA is pretty much the only one going rogue and trying to get back taxes and question Nexus. Is there another state that is doing what CA is doing?


#23

So, if you are willing to elaborate further: I am a FBA Seller. I live in a state outside of California. I pay Sales and Use tax to the state that I reside in. (Not California) Amazon chooses to store some of my inventory in California. I have no choice over that. I send it to wherever they stipulate. When a customer from Vegas buys something of mine–it could very well ship from a California Warehouse.

So, do I understand this correctly that I must have 500K in sales to customers in California–(Again, a State that I do NOT reside in) in order to have the Sales Nexus you spoke of. I am under that impression. My sales have not exceeded 500K in 2018 and will not exceed that in 2019. The South Dakota vs. Wayfair Case was decided in 2018. That is what spurred California to try and go and collect back taxes. Before that court case sellers where protected by the commerce clause that states that you don’t have to pay taxes to a state that you don’t live in–unless you have a substantial nexus. It Calif’s bill it says: " (a) On June 21, 2018, in South Dakota v. Wayfair, Inc. (2018) 585 U.S. ___ (hereafter Wayfair), the United States Supreme Court upheld SDCL Chapter 10-64, the South Dakota law that requires remote sellers that do not have a physical presence in that state to collect sales tax on all sales into South Dakota based on the seller’s level of economic activity in the state."

So I guess the “timing” is what I am struggling with. California’s new law states 500K for 2018 and 2019 as the “level of economic activity in the state”. I didn’t have close to that. (Mom and Pop seller–small fries) So again, what was considered the “level” of economic activity required to have Nexus–prior to 2018? Any thoughts?