The California Department of Tax and Fee Administration sent an email to Amazon FBA sellers on Tuesday, with subject line promising: “Relief May Be Available to Marketplace Sellers Using Fulfillment Centers in California.”
It’s the latest in the ongoing saga related to sales-tax collection. In May, the LA Times editorial board had called for the state’s revenue department to reconsider its approach to back taxes, calling it a “gotcha” approach to tax collection.
Sellers discussing the letter on the Amazon boards were wary of yesterday’s letter. “It’s the same sort of “relief” that a lame horse gets from a bullet to the head,” one seller wrote.
Sellers are wise to be cautious, and there’s a lot of money at stake. The LA Times had pointed to sellers who faced hundreds of thousands of dollars in back taxes, penalties and interest. If you sold through Amazon FBA from outside of California and think you may be impacted, be sure to get expert advice.
I see this as nothing more than a phishing scheme by California – voluntarily agree to pay lot of taxes, and potentially open yourself up to others (like franchise and\or income tax) and we’ll promise not to do what we weren’t going to be able to do anywhere. It’s sorta like the DA offering not to charge you with the death penalty if you plead guilty, when you were only cited for speeding.
No one is more creative than a govt looking for ways to get more taxes.