Wayfair Decision Means More Sales and Use Tax Revenues for Cities

摘要

Under a bill signed into law by Governor Newsom on April 25, 2019 (AB 147, Burke, Chapter 5, Statutes of 2019), California cities will share in additional sales and use tax revenues collected from out-of-state retailers. Based on the most recent estimates from the state Board of Equalization, the state and local governments lost an estimated $1.7 billion in tax revenues in fiscal year 2018-19 from e-commerce and traditional mail order sales — which includes a loss of $879 million for counties and cities. AB 147 makes clear that out-of-state retailers, including those in the e-commerce and mail order businesses, must pay California sales and use taxes to the state and local governments. This should increase revenues to counties and cities by hundreds of millions of dollars.