California Challenged on Test for City-Retailer Sales Tax Deals

Sept. 23, 2024, 9:19 PM UTC

A former California tax official is asking a state trial court to strike down a piece of administrative guidance that is at the heart of lucrative sales tax-sharing agreements some cities have with major retailers like Apple Inc. and Best Buy Co. Inc.

Dean Andal alleges in a lawsuit filed in Sacramento County Superior Court that the California Department of Tax and Fee Administration’s test requiring a retailer’s “genuine physical human interaction” in each transaction in a jurisdiction for that locality to receive the local portion of sales tax revenue is an invalid, underground regulation. The department has issued ...

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