California FTB Loses Bid to Trim Out-of-State Seller Tax Ruling

A California trial court judge rejected the Franchise Tax Board’s attempt to narrow his December order invalidating guidance that sought to make more online, out-of-state sellers liable for state income tax on Tuesday.

Judge Ethan P. Schulman of the California Superior Court, San Francisco County, said the FTB’s arguments were “feckless” and its motion “verges on the frivolous.”

He denied the board’s motion to vacate and modify his judgment that the board violated the California Administrative Procedure Act when it issued a memo and related guidance in 2022 rather than regulations. The memo adopted a new, broader interpretation of Public ...