Tax Relief Opportunity for Marketplace Sellers in California

Certain marketplace sellers in California may qualify for sales and use tax relief on account of Senate Bill No. 92 (SB-92). The bill became law—and went into immediate effect—on June 27, 2019. It states that qualifying retailers won’t be assessed tax by the California Department of Tax and Fee Administration (CDTFA) for taxable sales made prior to April 1, 2016. Qualifying retailers will also be relieved of penalties for taxable sales made for the period of April 1, 2016, to March 31, 2019.

To participate in the program, a qualifying retailer must act before September 25, 2019.


Under existing statutes, an out-of-state retailer can create tax nexus by engaging a third party, also known as a marketplace facilitator, that stores inventory and facilitates delivery in a state. This is a common practice when a marketplace facilitator, such as Amazon, fulfills sales on behalf of some, or all, of its sellers. Owning property that is stored or placed, even temporarily, in a state will trigger sales and use tax nexus, making a vendor responsible for collecting and remitting applicable sales and use tax.

Statute of Limitations

California’s statute of limitations for unregistered taxpayers is normally eight years for purposes of assessing sales and use tax liabilities. However, under SB-92, CDTFA will limit the lookback to April 1, 2016. It will also waive penalties for unreported tax for the three-year period April 1, 2016, to March 31, 2019, for those taxpayers who voluntarily come forward.


SB-92 is limited to retailers that are or were engaged in business in California solely because they used a marketplace facilitator to facilitate sales for delivery in California, and the facilitator stored the retailer’s inventory in the state.

For a taxpayer to benefit from SB-92, it must meet the definition of a qualified retailer under California Revenue and Taxation Code Section 6487.07. A qualified retailer is one who:

  • Isn’t currently registered with the CDTFA or was registered with the department prior to December 1, 2018
  • Didn’t file sales or use tax returns or make sales or use tax payments prior to being contacted by the department

If these conditions are met, a qualified retailer must do the following to claim the benefit:

  • Register with the CDTFA and file completed tax returns for all tax reporting periods by September 25, 2019
  • Pay in full the taxes due or apply for a payment plan where the final payment is made no later than December 31, 2021

We’re Here to Help

For more information or to find out if your business qualifies for this relief, please contact your Moss Adams professional or The deadline to take benefit from the new policy is September 25, 2019.

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