Current California Tax Issues: New Sales Tax Nexus Thresholds, Market-Based Sourcing Rules, Pass-Through Entities, and Local Taxes

Description

California sales and use, income and franchise, and local tax laws have recently undergone significant changes. Our panel will discuss these changes and address the issues businesses face to comply with California’s ever-changing tax laws.

In the wake of Wayfair, California has now adopted an economic nexus threshold for use tax registration, reporting, and remittance obligations. After the California Department of Tax and Fee Administration (CDTFA) adopted a $100,000 sales or more than 200 transaction threshold on December 2018, the California legislature enacted legislation overriding the CDTFA, increasing the threshold to $500,000 and eliminating the transactions threshold. The legislation also created use tax collection obligations for marketplace facilitators, and various reporting rules for marketplace sellers.

For income and franchise tax purposes, California generally requires multistate businesses to apportion income with a single-sales factor. For sales of other than tangible personal property, California assigns sales under market-based sourcing regulations. Whether a business even has a California filing requirement often turns on the application of these regulations. The California Franchise Tax Board recently held its fourth interested-parties meeting on proposed amendments to the market-based sourcing regulations. The proposed changes could have a significant impact on California income and franchise tax liabilities.

Listen as our panel of experts explains the complex compliance demands of California's business tax requirements, including filing and remitting sales tax, applying the market-based sourcing rules, filing returns for pass-through entities, and other current developments in California business taxation.