California Attorney General Urges Supreme Court to Allow States to Collect Taxes from Out-of-State Retailers

Press release from the California Attorney General:

California Attorney General logoCalifornia Attorney General Xavier Becerra joined a bipartisan coalition of 44 Attorneys General in filing an amicus brief to urge the U.S. Supreme Court to reject its “physical presence” rule, which restricts states’ ability to collect certain taxes from out-of-state retailers. In 1967, the U.S. Supreme Court ruled in National Bellas Hess v. Department of Revenue that states were prohibited from requiring out-of-state retailers to collect sales and use taxes on goods purchased through the mail. With the rise of online shopping, out-of-state retailers – including online retailers – have used the physical presence rule to avoid collecting sales and use taxes.

“There is just no reason in our modern economy why out-of-state and online retailers should enjoy an exception that our local businesses do not,” said Attorney General Becerra. “That is why we are urging the U.S. Supreme Court to reject its outdated ‘physical presence’ rule. California proudly boasts the sixth largest economy in the world, and in order to continue thriving, we want to ensure that all those who do business in our state play by the same rules.”

South Dakota recently enacted a statute requiring online retailers to collect South Dakota sales taxes. On September 14, 2017, the South Dakota Supreme Court ruled that South Dakota’s statute was unconstitutional. South Dakota filed a petition for writ of certiorari asking the U.S. Supreme Court to revisit the matter, and Attorney General Becerra joined a bipartisan coalition supporting South Dakota. On November 3, 2017, the U.S. Supreme Court granted review.

Attorney General Becerra filed this brief along with the Attorneys General of Colorado, Alabama, Arizona, Arkansas, Connecticut, the District of Columbia, Florida, Georgia, Hawai’i, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, Tennessee, Texas, Utah, Vermont, Virginia, Virgin Islands, Washington, Wisconsin, and Wyoming.




  • On a functional level, when we buy from Amazon, we get charged sales tax. When we buy from a third party seller through Amazon’s website, we don’t get charged sales tax unless the seller has a physical presence in California. If you’re buying a pricey item, it can be less expensive to buy from a small-time retailer located outside California when the price is higher, because you’re not paying sales tax.

    • Or just drive up to Grants Pass and get it. Great excuse for a beautiful drive and a visit to the Smith River, made reasonable by the ever-reaching, ever-needing career parasites in Sacramento.

      • the misadventures of bunjee

        That’s what I do. Going to search my car for receipts Sacramento? Buzz off.

        • It would not surprise me if the staff at the Agricultural Inspection Stations on 199 and in Smith River start to ask about any purchases made in Oregon and ask for the sales tax before allowing one to continue into California.

      • When California residents purchase items in Oregon, or other states without sales tax, they must declare those purchases, and pay the appropriate sales tax, when filing their tax return.

        Also, many retailers near the California border RAISE their rates by the amount of the California sales tax, because Californians think that they are getting a deal by shopping in Brookings, Grants Pass or Medford. (I know many people in Brookings who shop at Wal-Mart or Home Depot in Crescent City because even with a 7.50% sales tax items are still cheaper.)

  • 6th largest economy in the world and we have 3rd world infrastructure and probably a quarter of the homelessness in the us, California needs to pull its head out its ass it doesn’t need more money it needs to quit wasting it on bullshit.

    • well said, remember how many times have LA tried to tax the satellites and all air craft that fly over it. Pulls parallel to wanting to tax the internet. here you have a group of people that want to tax anything and everything that makes money. So they can avoid working and get a fatter pay check. They have no intention of ever putting the money to use for the public.

      Look at the cigarette tax increase that happened last april. The reason for it was that new york had that highest cigarette tax in the country. California didn’t like that so they raised their tax. However unlike the previous cigarette taxes which where established to offset healthcare cost and to fund schools and establish the California lotto (which again was to benefit schools). None of the money was ear marked to go anywhere it was all left in the general fund. So its pretty much gone to pay raises for the biggest guys out there.

      Now i am not a smoker, but a 65% tax on tobacco and 2.80$ per pack of cigarettes tariff is incredibly high. When you think about that fact that it went from 28% on tobacco, and 0.80$ per pack on cigarettes, its even more ridiculous.

  • It makes perfect sense for large businesses to be able to do the bookkeeping to parse out the taxes to the 50 states. Even Amazon, Zapatos, any of them, currently only have to pay taxes in a state where they have a physical presence. So, if they do not have a shipping warehouse in your state, your state misses out on (likely) much needed funding.
    On the other hand, with the rise of websites for small businesses and craftspeople this has been a terrifying issue that raises its head every few years. If we had to parse out the sales tax we owed to every state from our online sales when we had a business,, it would mean a $1.50 check to Delaware, $5.00 to New Hampshire, $4.50 to Hawaii, etc., as most of our business was concentrated to a few states, but every state had some orders. If the law omits businesses under a certain size, that would make sense. Otherwise, not so much.

  • Concerned Trinity County Resident

    The point made by ‘Guest’ is accurate and right on; well said.

  • Senor Becerra and Mr. moonbeam don’t seem too concerned about the law when it comes to illegal immigration and border security for human citizens in california and america. maybe they should seize the millions in remitences bieng sent out of our state each year by the immigrant colonialists.

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