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California BOE Reminds: Sales of Counterfeit Goods are Taxable


 Illegal activity may be subject to sales tax in California.

Last fall, California lawmakers approved legislation that made the sale of counterfeit tangible personal property subject to sales tax. While not condoning illegal activity, the law acknowledges that it exists and attempts to use it to augment tax revenue.

Now the State Board of Equalization has updated Publication 103, Sales for Resale to include a section entitled “All sales of counterfeit goods are taxable.” It reminds that, “If a person is convicted in trafficking counterfeit goods, then all of their sales and purchases of those counterfeit goods will be considered taxable.” In addition:

“A person may no longer claim a resale deduction for the sale of counterfeit goods, and any purchases made of counterfeit goods for subsequent resale will also be taxable.”

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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.