September 15, 2021

An out-of-state online retailer's petition for redetermination of its obligation to collect California sales and use tax was denied because the taxpayer, by applying for and maintaining a valid certificate of registration, assumed a responsibility to collect tax.

In this matter, the California Department of Tax and Fee Administration (CDTFA) determined that the taxpayer was required to collect and remit use tax to the department because the taxpayer held a certificate of registration. The taxpayer argued that it only applied for the certificate because its vendors required it and not because it was legally obligated to collect and remit use tax. Further, the taxpayer contended that the certificate was irrelevant because the taxpayer lacked nexus with California. However, it was noted that the taxpayer held a certificate throughout the liability period. Therefore, the taxpayer had a duty to collect and remit use tax from its California customers until the certificate was canceled. Further, the taxpayer’s argument that it lacked substantial nexus with the state was irrelevant. Accordingly, the taxpayer’s petition was denied.

Doors On-Line, Inc., California Office of Tax Appeals, No. 20025866, May 26, 2021, released July 2021

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