SACRAMENTO, Calif. (Legal Newsline) – California has passed the buck to small online merchants in order to make up for tax it never charged Amazon.
That’s the allegation made Sept. 29 in Online Merchants Guild’s lawsuit against the California Department of Tax & Fee Administration. The guild says California forgave Amazon’s failure to collect sales tax on California sales for several years because of the political benefits Amazon could give the CDTFA and its officers.
“The result was billions in foregone tax revenue,” the suit says. “CDTFA recently began looking to make someone pay the missing sales taxes. Not Amazon, but the hundreds of thousands of U.S.-based third-party merchants outside of Amazon who supply Amazon’s store.”
Amazon has been “feeding” to regulators the names of merchants who, in turn, have been targeted for supposed tax obligations dating to 2012, the suit says.
“CDTFA’s conduct is causing marketplace havoc and threatening thousands of small business owners with financial ruin,” the suit says.