California State and Local Tax Update

Economic Nexus and Marketplace Facilitators

Corey L. Rosenthal, JD, and M. L. Castilla, JD

The Supreme Court's decision in South Dakota v. Wayfair, Inc. [585 U.S. __, (2018)] has driven the most substantive changes to the state and local tax landscape in nearly 30 years, requiring prompt attention from practitioners to address the evolving implications of economic nexus on clients' operations (“Changing the State and Local Tax Nexus Playing Fields,” The CPA Journal, May 2019, http://bit.ly/31HQQxh). To properly advise entities that do business in multiple jurisdictions, CPAs must remain apprised of developments in key states. This article will provide an overview of recent developments in California that highlight the need for flexibility by legislators working to define practical thresholds without unduly burdening taxpayers.