Tax & Accounting Blog

Still alive and kicking – proposed click-through nexus bill in California

Indirect Tax, Sales Tax Nexus June 10, 2011

It’s back – proposed click-through nexus legislation.  On June 1, proposed click-through nexus bill passed the California Assembly and is now pending Senate committee referral.

The bill, A.B. 153, expands the definition of  a “retailer engaged in business in this state” to include any retailer entering into agreements under which a person or persons in this state, for a commission or other consideration, directly or indirectly refer potential purchasers, whether by an Internet-based link or an Internet Website, or otherwise, provided the total cumulative sales price from all sales by the retailer to purchasers in California in excess of $500,000 within the preceding 12 months.   The threshold is significantly higher than other affiliate nexus provisions current in force in other states (generally $10,000) and was changed upward just days ago.

One of the biggest proponents of this legislation, Assemblywomen Nancy Skinner, believes that the bill “will close the current loophole in California law which has allowed out-of-state companies to avoid collecting California sales and use tax.”

The full text of A.B. 153 can be found here:  A.B. 153