California Updates Sales Tax Rules for Online Marketplaces

New California rules are in effect for online marketplace facilitators without changes requested by tax practitioners who said they expand tax compliance duties to advertisers and websites that don’t handle payments.

In an explanation accompanying the final rules, the California Department of Tax and Fee Administration said it disagreed with arguments that the changes were needed.

Although platforms that don’t process payments can fall under the definition of marketplace facilitators, the rules don’t make those platforms liable for taxes they aren’t already responsible for collecting and remitting, the department said.