SEMA eNews Vol. 22, No. 18, May 2, 2019

California Raises Threshold to $500,000 for Collecting Out-of-State Sales Tax

By SEMA Washington, D.C., Staff

California has raised to $500,000 the amount of sales remote retailers must make before being obligated to collect state sales tax. It had been $100,000 or 200 transactions as of April 1, 2019.  

The tax collection requirement stems from the U.S. Supreme Court’s 2018 “South Dakota vs. Wayfair” decision allowing states to require remote retailers to collect sales taxes even when they have no physical presence in the state. The Court supported a South Dakota law requiring collection unless the out-of-state retailer had less than $100,000 or 200 transactions in annual sales.  

To date, more than 30 states will now require collection. Most of the states adopted South Dakota’s threshold amounts, but California lawmakers decided that it was appropriate to raise the limit to $500,000.  

For more information on remote sellers and state sales taxes, visit the SEMA website.

Questions? Contact Stuart Gosswein at stuartg@sema.org.

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