Proposed new local sales tax reporting obligations for large online retailers. On September 10, the legislature passed SB 792 and sent it to the governor. The bill requires a qualified retailer whose qualified sales of tangible personal property transacted online exceeded $50 million for the previous calendar year to include with each tax return a schedule that reports the gross receipts from qualified sales of tangible personal property shipped or delivered to a purchaser in each local jurisdiction (e.g., city, county) in California. The governor’s position on the bill is not clear.
No reinstatement of current NOL suspension. Finally, a number of trade associations were hoping for legislation this session to repeal AB 85, which was enacted last year and suspended, for larger taxpayers, for three years the net operating loss deduction and limited utilization of tax credits, which was essentially a tax increase of approximately $9.2 billion over three years. Those efforts were not successful this session, meaning the suspensions currently found in AB 85 remain the law. A targeted bill (AB 593) to restore NOLs, but only for certain biotech companies, also died in committee in May.
Eric J. Coffill is a senior counsel at Eversheds Sutherland (U.S.) LLP.