New California law taxes online purchases

Tens of millions in revenues are expected to be generated by a new law that requires California consumers to pay taxes on out-of-state online retails purchases.

The law goes into effect on Sept. 15, the state Board of Equalizaton reported.

AB 155 expands the types of out-of-state retailers required to register with the Board of Equalization, and requires them to begin collecting and remitting use tax on sales.

"This new law may require some out-of-state online retailers to start collecting tax, but others will remain completely unaffected," Board of Equalization Member George Runner said in a statement.

The board is sending letters to more than 200 out-of-state retailers notifying them about the new law. Retailers will be able to register online through eReg, and remit the tax collected by e-filing their returns.

If out-of-state retailers do not collect the tax, California consumers must continue to report and pay their use taxes, reported the board.

Consumers can pay directly to the board using eReg or pay on their California income tax returns with the option of using the Use Tax Lookup Table.

The law applies to out-of-state retailers that have sold more than $1 million to California consumers in the past year and has had more than $10,000 in sales referred by an affiliate operating in California.

Other types of businesses also are impacted by the law.