CSEA’s First 2019 Bill List Is Here!

Our new bill list contains some very important information regarding how the legislature intends to deal with both the Wayfair and Dynamex decisions! CSEA asked the legislature to weigh in on both of these topics at our annual Jim Stern Legislative Day at the Capitol, and we are pleased that they have done so.
 
Wayfair
AB 147 (Burke) would take effect on April 1, 2019. It would change the definition of a retailer engaged in business in the state to apply to individuals who are selling more than $500,000 in tangible property in California. It would effectively eliminate the current threshhold of 200 transactions or $100,000 in sales. The bill defines businesses like Wayfair as “marketplace facilitators” and places the filing burden on them. It would require the marketplace facilitator to include all sales made on its own behalf and sales facilitated on behalf of marketplace sellers. Although retailers over the new $500,000 threshold would still have to calculate their sales taxes by district, the number of individuals and businesses affected would be reduced.
 
Dynamex
AB 5 (Gonzalez) was introduced as an intent bill. That means the legislature intends to use this bill as a way to codify in statute the “ABC” test to determine who qualifies as an independent contractor as outlined in the Dynamex case. It is anticipated that there will be quite a lot of evolving language in this bill as different groups try to carve out exemptions. CSEA’s advocacy team will continue to monitor the situation and look for opportunities to be part of a coalition that brings together groups within the financial services industry.
 
Five additional bills were placed on CSEA’s watch list as of February 6, 2019:

• AB 286 (Bonta) would reduce the excise tax placed on cannabis from the 15 percent amount approved under Proposition 64 to 11 percent until June 1, 2022, at which time it will revert back to 15 percent. This bill would also suspend the cultivation tax until June 1, 2022. The intent with this bill is to r
• AB 357 (Nazarian) would change the current statute of limitations on tax liens from the 20 years beginning from the last statutory lien date for each taxable year or from the date that any other liability that is not associated with a taxable year becomes due and payable, to restarting the 20 year statute of limitations on both tax liens to the date of the newest lien.
• AB 364 (Calderon) would, for taxable years beginning on or after January 1, 2020, exempt both new limited partnerships and new limited liability companies from the annual minimum tax for its first taxable year. CSEA typically supports bills that eliminate annual minimum franchise taxes.
• AB 308 (Muratsuchi) would reduce the annual minimum tax for a limited liability company that is a small business to $400, reduce the annual minimum tax for microbusinesses to $100, and extend indefinitely the exemption for a limited liability company that is a small business solely owned by a deployed member of the United States Armed Forces.
• ACA 2 (Assembly Constitutional Amendment - Nazarian) would completely abolish the remaining parts of the BOE in the state constitution and install its powers into the CDTFA and Office of Tax Appeals.