A new law, AB147, was signed by Gov. Gavin Newsom on Thursday, requiring Amazon and eBay to collect sales taxes from out-of-state sellers who earn more than $500,000 annually in California.

A new law, AB147, was signed by Gov. Gavin Newsom on Thursday. Photo by Bench Accounting on Unsplash.

A new law, AB147, was signed by Gov. Gavin Newsom on Thursday, requiring Amazon and eBay to collect sales taxes from out-of-state sellers who earn more than $500,000 annually in California. Sacramento officials predict that by 2021, the law will generate an additional $759 million in taxes.


The bill’s author, Assemblywoman Autumn Burke (D-Inglewood), said:  “AB 147 will level the playing field between California retailers and their out-of-state competitors. It also reduces administrative burdens for small online retailers, so they can spend time and resources to focus on their business and not tax compliance.”

In 2018, the U.S. Supreme Court ruled that states can collect sales taxes from companies outside their borders. On April 1, out-of-state sellers earning more than $100,000 in California sales (or those making more than 200 transactions) were required to register as a retailer and collect taxes. AB 147 raised the cap to $500,000 in hopes of protecting small businesses.

Learn more about the bill here.

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