An April 13 hearing on California Assembly Bill 178 had previously been postponed and rescheduled for April 27.  AB 178, commonly referred to as the Amazon Tax Bill, would require businesses with no physical presence in California to collect and remit the state’s sales tax on products purchased online by Californians.

 

However, a bit of rare good news for California taxpayers came out of Sacramento yesterday. Just as the bill was scheduled for consideration, the Assembly Committee on Revenue & Taxation voted to remove AB 178 from the docket, effectively taking this odious piece of legislation off the table, at least for this year.

 

Current law, under Quill v. North Dakota, requires a business have a physical presence or “nexus” in a state in order for the state to compel that business to collect and remit sales taxes. AB 178 represented an attempt to circumvent the federal interstate commerce law by presuming that a company has a physical nexus if business is solicited through a third-party advertiser that is based in California.