Senate & Assembly Chairs announce plans to introduce legislation to address U.S. Supreme Court decision, South Dakota v. Wayfair

Monday, December 10, 2018

Sacramento, CA – Senator Mike McGuire, Chair of the Senate Committee on Governance and Finance and Assemblywoman Autumn Burke, Chair of the Assembly Committee on Revenue and Taxation, announced plans today to work together and implement the recent United States Supreme Court decision in South Dakota v. Wayfair, Inc. This decision authorizes states to begin collecting sales and use tax from online and out-of-state retailers without a physical presence in California.

Senator McGuire and Assemblywoman Burke anticipate that the California Department of Tax and Fee Administration will issue a notice to affected retailers this month, clarifying their collection and remittance obligations under existing law. Both Senator McGuire and Assemblywoman Burke are hopeful this notice will serve as an appropriate starting point but believe that legislative modifications will likely be required to accommodate the interests of taxpayers, retailers and administrative agencies.

“The Department deserves credit for moving forward on Wayfair implementation: The Wayfair decision is the most important development in tax law in decades, and it is difficult to overstate its consequences for taxpayers, small and large businesses, as well as the state and local governments,” Senator Mike McGuire said. “It is also the Legislature’s responsibility to ensure that California not only implements Wayfair effectively, but also fairly, and without being too burdensome on the thousands of small businesses that are the foundation of the Golden State’s economy. As a result, Chairwoman Burke and I intend to work together in early 2019 to advance these goals.”

“It is clear to me that a one-size-fits-all approach modeled after South Dakota law is not necessarily appropriate for a state with 40 million residents,” said Assemblywoman Autumn R. Burke (D-Inglewood). “The legislative process will also afford stakeholders, including local governments, California retailers, and the e-commerce sector, the ability to weigh in on public policy that will impact them directly.”

“While we are considering legislation,” continued Assemblywoman Burke, “we are also committed to working closely with CDTFA to ensure the smoothest possible implementation of Wayfair for consumers, retailers, and the state.”

Joining in support of Assemblywoman Burke and Senator McGuire’s legislative efforts is CA State Treasurer-elect, Fiona Ma, CPA. “AMAZON and other online retail giants need to do the right thing and level the playing field. They know their customers, they collect the payments, they deliver the products, and their distribution sites are all over our state. They can easily collect the taxes on behalf of their third party sellers to ensure California gets all the tax dollars due,” said Treasurer-elect Ma.

The change in tax collection from the Wayfair decision is expected to bring in up to $1 billion annually in additional local and state tax revenue.

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