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California: Illegal and Taxable

  • Sep 26, 2014 | Gail Cole

 California: even the convicted sometimes have to remit sales tax.

Updated, 2.9.2015: The California State Board of Equalization has released a special notice regarding the new law that makes all sales of counterfeit goods subject to sales tax.

All sales are taxable in California, unless the transaction is specifically exempted or excluded by law. California law defines the terms “retail sale,” “sale at retail,” “storage” and “use” and outlines when and how sales and use tax applies under those conditions. Now, under a new law, even illegal sales are subject to California sales and use tax.

Assembly Bill No. 2681, filed as Chapter 477 on September 19, 2014, includes in the definition of retail sale or sale at retail “any sale by a convicted seller of tangible personal property with a counterfeit mark on, or in connection with, that sale, regardless of whether the sale is for resale in the regular course of business.”

Convicted seller is defined as “a person convicted of a violation under Section 350 or 653w of the Penal Code or Section 2320 of Title 18 of the United States code on or after the date of sale.”

Convicted sellers who do not pay tax on those sales will receive a notice of deficiency determination, which will be “mailed within one year after the last day of the calendar month following the date of conviction.”

Even convicts must collect and remit sales tax.

Automated sales tax software simplifies the collection and remittance of sales tax—for law abiding citizens. Learn more.

photo credit: Thomas Hawk via photopin cc

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.