California’s recent decision to scoop tens of thousands of out-of-state online businesses onto its income tax rolls will likely spur other states to do the same, but not without courtroom battles over the state’s legal rationale.
Guidance from the state’s Franchise Tax Board mirrors an August 2021 statement from the Multistate Tax Commission reinterpreting a federal law that has largely shielded out-of-state retailers from state income taxes for more than 60 years.
The new interpretation, which applies retroactively, removes some of the protections for sellers that weave online support services into their e-commerce models. The guidance is expected to impact ...