California has enacted new requirements on its businesses that purchase from the internet. The must register to pay "use" tax, which is a sales tax on items purchase over the Internet, from catalogs, and over the telephone. If the seller does not collect sales tax, the business must report the sale and pay use tax.
Most states already have this requirement, and so does California, but the new law requires registration and a separate return. If the businesses that are required to register under the law (i.e. businesses that gross in excess $100,000) fail to register, the State can estimate the amount of use tax for the business and charge interest and penalties for non-payment. Also, they will look back to 2007 to collect those taxes. Amazon.com and Overstock.com are currently challenging the constitutionality of the law.
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If you have questions, contact Jeffery Jacobson.