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Business Taxes Law Guide—Revision 2024

Sales And Use Tax Law

Revenue and Taxation Code

Division 2. Other Taxes
Part 1. Sales and Use Taxes
Chapter 1.7. Marketplace Facilitator Act

Article 3. Marketplace Facilitator Relief.

Article 4. Operative Date.


Article 1. General Provisions and Definitions


6040. Title of chapter. This chapter shall be known as and referred to as the Marketplace Facilitator Act.

History—Added by Stats. 2019, Ch. 5 (AB 147), in effect April 25, 2019, operative October 1, 2019.


6041. Definitions. For purposes of this chapter, the following definitions shall apply:

(a) "Marketplace" means a physical or electronic place, including, but not limited to, a store, booth, internet website, catalog, television or radio broadcast, or a dedicated sales software application, where a marketplace seller sells or offers for sale tangible personal property for delivery in this state regardless of whether the tangible personal property, marketplace seller, or marketplace has a physical presence in this state.

(b) "Marketplace facilitator" means a person who contracts with marketplace sellers to facilitate for consideration, regardless of whether deducted as fees from the transaction, the sale of the marketplace seller’s products through a marketplace operated by the person or a related person and who does both of the following:

(1) Directly or indirectly, through one or more related persons, engages in any of the following:

(A) Transmitting or otherwise communicating the offer or acceptance between the buyer and seller.

(B) Owning or operating the infrastructure, electronic or physical, or technology that brings buyers and sellers together.

(C) Providing a virtual currency that buyers are allowed or required to use to purchase products from the seller.

(D) Software development or research and development activities related to any of the activities described in paragraph (2), if such activities are directly related to a marketplace operated by the person or a related person.

(2) Directly or indirectly, through one or more related persons, engages in any of the following activities with respect to the marketplace seller’s products:

(A) Payment processing services.

(B) Fulfillment or storage services.

(C) Listing products for sale.

(D) Setting prices.

(E) Branding sales as those of the marketplace facilitator.

(F) Order taking.

(G) Providing customer service or accepting or assisting with returns or exchanges.

(c) "Marketplace seller" means a person who has an agreement with a marketplace facilitator and makes retail sales of tangible personal property through a marketplace owned, operated, or controlled by a marketplace facilitator, even if that person would not have been required to hold a seller’s permit or permits, or required to collect the taxes imposed pursuant to Chapter 2 (commencing with Section 6051) or Chapter 3 (commencing with Section 6201), or a fee administered pursuant to Part 30 (commencing with Section 55001), had the sale not been made through that marketplace.

History—Added by Stats. 2019, Ch. 5 (AB 147), in effect April 25, 2019, operative October 1, 2019. Amended by Stats. 2021, Ch. 421 (1402), in effect January 1, 2022, substituted "taxes" for "tax" after "or required to collect the" and added "Chapter 2 (commencing with Section 6051)" and "or a fee administered pursuant to Part 30 (commencing with Section 55001)" before and after "Chapter 3 (commencing with Section 6201)" respectively in subdivision (c).

Note.—Sec. Section 7, subd. (b) of Stats. 2019, Ch. 5 (AB 147) specifies:

Implementation of Chapter 1.7 (commencing with Section 6040) of Part 1 of Division 2 of the Revenue and Taxation Code and Section 6203.1 of the Revenue and Taxation Code, as both proposed to be added by this act, for the 2019–20 fiscal year, is deemed an emergency and necessary for the immediate preservation of the public peace, health, and safety, or general welfare and, therefore, the California Department of Tax and Fee Administration is hereby authorized to adopt emergency regulations to implement those provisions during the 2019–20 fiscal year, in accordance with the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). Notwithstanding any other law, the emergency regulations adopted by the California Department of Tax and Fee Administration may remain in effect for two years from the date of adoption.


6041.1. Online sales. Newspapers, internet websites, and other entities that advertise tangible personal property for sale, refer purchasers to the seller by telephone, internet link, or other similar means to complete the sale, and do not participate further in the sale are not facilitating a sale under this chapter.

History—Added by Stats. 2019, Ch. 5 (AB 147), in effect April 25, 2019., operative October 1, 2019. Stats. 2019, Ch. 34 (SB 92), in effect June 27, 2019, operative October 1, 2019, deleted "that do not transmit or otherwise communicate the offer and acceptance for the sale of tangible personal property between the seller and purchaser, and do not process payments directly or indirectly through third parties for the tangible personal property sold," and added "refer purchasers to the seller by telephone, internet link, or other similar means to complete the sale, and do not participate further in the sale" before "are not facilitating…" at the end of the sentence.


6041.2. Related persons. For purposes of this chapter, the following shall apply:

(a) A person is related to another person if both persons are related to each other pursuant to Section 267(b) of the Internal Revenue Code and the regulations thereunder.

(b) (1) A "fee administered pursuant to Part 30 (commencing with Section 55001)" shall include a charge pursuant to the Lead-Acid Battery Recycling Act of 2016 (Article 10.5 (commencing with Section 25215) of Chapter 6.5 of Division 20 of the Health and Safety Code), a lumber products assessment pursuant to Article 9.5 (commencing with Section 4629) of Chapter 8 of Part 2 of Division 4 of the Public Resources Code, a covered electronic waste recycling fee pursuant to Chapter 8.5 (commencing with Section 42460) of Part 3 of Division 30 of the Public Resources Code, and a California tire fee pursuant to Article 5 (commencing with Section 42885) of Chapter 17 of Part 3 of Division 30 of the Public Resources Code.

(2) A "fee administered pursuant to Part 30 (commencing with Section 55001)" shall not include the fee administered pursuant to Part 21.1 (commencing with Section 42100).

History—Added by Stats. 2019, Ch. 5 (AB 147), in effect April 25, 2019, operative October 1, 2019. Amended by Stats. 2019, Ch. 34 (SB 92), in effect June 27, 2019, operative October 1, 2019, substituted "of the Internal Revenue Code" for "Title 26 of the United States Code" after "Section 267(b)." Amended by Stats. 2021, Ch. 421 (1402), in effect January 1, 2022, added "the following shall apply:" after "For purposes of this chapter," relettered the first paragraph to (a) and added "A" in the first sentence before "person is related to another," and added subdivisions (b)(1) and (b)(2).

Note.—Sec. Section 7, subd. (b) of Stats. 2019, Ch. 5 (AB 147) specifies:

Implementation of Chapter 1.7 (commencing with Section 6040) of Part 1 of Division 2 of the Revenue and Taxation Code and Section 6203.1 of the Revenue and Taxation Code, as both proposed to be added by this act, for the 2019–20 fiscal year, is deemed an emergency and necessary for the immediate preservation of the public peace, health, and safety, or general welfare and, therefore, the California Department of Tax and Fee Administration is hereby authorized to adopt emergency regulations to implement those provisions during the 2019–20 fiscal year, in accordance with the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). Notwithstanding any other law, the emergency regulations adopted by the California Department of Tax and Fee Administration may remain in effect for two years from the date of adoption.


6041.5. Delivery Network Company; definitions. (a) Notwithstanding Section 6041, a person that is a delivery network company is not a marketplace facilitator for purposes of this chapter.

(b) For purposes of this section, all of the following definitions shall apply:

(1) "Delivery network company" means a business entity that maintains an internet website or mobile application used to facilitate delivery services for the sale of local products.

(2) "Delivery services" means the pickup of one or more local products from a local merchant and delivery of the local products to a customer. "Delivery services" do not include any delivery requiring over 75 miles of travel from the local merchant to the customer.

(3) "Local merchant" means a third-party merchant, including, but not limited to, a kitchen, restaurant, grocery store, retail store, convenience store, or business of another type, that is not under common ownership or control with the delivery network company.

(4) "Local product" means any item, including food, other than freight, mail, or a package to which postage has been affixed.

(c) Notwithstanding subdivision (a), a delivery network company that meets the definition set forth in subdivision (b) of Section 6041 may elect, in a reasonable manner and duration prescribed by the department, to be deemed a marketplace facilitator pursuant to this chapter. Consistent with this section, the department shall adopt regulations that establish the criteria for obtaining and retaining an election to be a marketplace facilitator pursuant to this subdivision.

History—Added by Stats. 2019, Ch. 5 (AB 147), in effect April 25, 2019, operative October 1, 2019. Stats. 2019, Ch. 34 (SB 92) in effect June 27, 2019, operative October 1, 2019, deleted former paragraph (2) and renumbered former paragraphs (3), (4), and (5) as (2), (3), and (4), respectively; and added subdivision (c).


6041.6. Vehicle rental broker; definitions. (a) Notwithstanding Section 6041, a person that is a vehicle rental broker is not a marketplace facilitator with respect to the facilitation, for a commission, fee, or other consideration, of a passenger vehicle rental on behalf of a rental company that is not a related person for purposes of this chapter.

(b) For purposes of this section, the following definitions apply:

(1) "Optional accessory" includes, but is not limited to, a child seat, a GPS navigation system, snow chains or other traction device, and a ski rack.

(2) "Passenger vehicle" has the same meaning as defined in Section 465 of the Vehicle Code.

(3) "Passenger vehicle rental" means any lease of a passenger vehicle, including any optional accessory, which is classified as a “continuing sale” and a “continuing purchase” in accordance with Sections 6006.1 and 6010.1.

(4) "Rental company" means a person or entity in the business of leasing passenger vehicles to the public and that is registered with the department under Chapter 2 (commencing with Section 6051) or Chapter 3 (commencing with Section 6201).

(5) "Vehicle rental broker" means a person that facilitates, for a commission, fee, or other consideration, passenger vehicle rentals through an online marketplace owned, operated, or controlled by the person or a related person.

History—Added by Stats. 2022, Ch. 228 (SB 1312), in effect January 1, 2022.


Article 2. Registration and Collection


6042. Seller and retailer. A marketplace facilitator shall be considered the seller, retailer, and dealer for each sale facilitated through its marketplace for purposes of determining whether the marketplace facilitator is required to register with the department under Chapter 2 (commencing with Section 6051), Chapter 3 (commencing with Section 6201), or under any other law that imposes a fee administered pursuant to Part 30 (commencing with Section 55001), in addition to each sale for which the marketplace facilitator is the seller, retailer, dealer, or any combination of the three, under Chapter 1 (commencing with Section 6001), or any other law that imposes a fee administered pursuant to Part 30 (commencing with Section 55001).

History—Added by Stats. 2019, Ch. 5 (AB 147), in effect April 25, 2019, operative October 1, 2019. Amended by Stats. 2021, Ch. 421 (1402), in effect January 1, 2022, deleted "and" after "considered the seller," added "and dealer" after "retailer," deleted "or" after "Section 6051" and added a comma after "(commencing with Section 6051," added "or under any other law that imposes a fee administered pursuant to Part 30 (commencing with Section 55001)," after "(commencing with Section 6201)," deleted "or" after "is the seller," substituted "dealer, or any combination of the three" for "or both" before "under Chapter 1 (commencing with Section 6001)," and added ", or any other law that imposes a fee administered pursuant to Part 30 (commencing with Section 55001)" after "under Chapter 1 (commencing with Section 6001)."

Note.—Sec. Section 7, subd. (b) of Stats. 2019, Ch. 5 (AB 147) specifies:

Implementation of Chapter 1.7 (commencing with Section 6040) of Part 1 of Division 2 of the Revenue and Taxation Code and Section 6203.1 of the Revenue and Taxation Code, as both proposed to be added by this act, for the 2019–20 fiscal year, is deemed an emergency and necessary for the immediate preservation of the public peace, health, and safety, or general welfare and, therefore, the California Department of Tax and Fee Administration is hereby authorized to adopt emergency regulations to implement those provisions during the 2019–20 fiscal year, in accordance with the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). Notwithstanding any other law, the emergency regulations adopted by the California Department of Tax and Fee Administration may remain in effect for two years from the date of adoption.


6043. Retailer. A marketplace facilitator that is registered with the department or required to register with the department under Chapter 2 (commencing with Section 6051) or Chapter 3 (commencing with Section 6201) and that facilitates a retail sale of tangible personal property by a marketplace seller is the retailer selling or making the sale of the tangible personal property sold through its marketplace for purposes of this part.

History—Added by Stats. 2019, Ch. 5 (AB 147), in effect April 25, 2019, operative October 1, 2019.


6043.1. Retailer and dealer. A marketplace facilitator that is registered with the department or required to register with the department under any law that imposes a fee administered pursuant to Part 30 (commencing with Section 55001) and that facilitates a retail sale of tangible personal property by a marketplace seller is the retailer or dealer or both for purposes of collecting and remitting any fee imposed on the consumer in regards to that retail sale..

History—Added by Stats. 2021, Ch. 421 (1402), in effect October 1, 2021.


6044. Calculating sales. For purposes of determining the total combined sales of tangible personal property for delivery in this state pursuant to Section 6203:

(a) A marketplace facilitator shall include all sales of tangible personal property for delivery in this state, including sales made on its own behalf and by all related persons and sales facilitated on behalf of marketplace sellers.

(b) A marketplace seller shall include all sales of tangible personal property for delivery in this state, including sales made on its own behalf and sales facilitated through any marketplace facilitator’s marketplace.

History—Added by Stats. 2019, Ch. 5 (AB 147) in effect April 25, 2019.


6045. Seller. A marketplace seller shall register with the department under Chapter 2 (commencing with Section 6051), Chapter 3 (commencing with Section 6201), or any other law that imposes a fee administered pursuant to Part 30 (commencing with Section 55001), as required, for retail sales made on its own behalf and not facilitated through a registered marketplace facilitator.

History—Added by Stats. 2019, Ch. 5 (AB 147), in effect April 25, 2019, operative October 1, 2019. Amended by Stats. 2021, Ch. 421 (1402), in effect January 1, 2022, deleted "or," after "(commencing with Section 6051)," replaced "commending" with "commencing" after "Chapter 3" and added "or any other law that imposes a fee administered pursuant to Part 30 (commencing with Section 55001" after "Section 6201."

Note.—Sec. Section 7, subd. (b) of Stats. 2019, Ch. 5 (AB 147) specifies:

Implementation of Chapter 1.7 (commencing with Section 6040) of Part 1 of Division 2 of the Revenue and Taxation Code and Section 6203.1 of the Revenue and Taxation Code, as both proposed to be added by this act, for the 2019–20 fiscal year, is deemed an emergency and necessary for the immediate preservation of the public peace, health, and safety, or general welfare and, therefore, the California Department of Tax and Fee Administration is hereby authorized to adopt emergency regulations to implement those provisions during the 2019–20 fiscal year, in accordance with the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). Notwithstanding any other law, the emergency regulations adopted by the California Department of Tax and Fee Administration may remain in effect for two years from the date of adoption.


Article 3. Marketplace Facilitator Relief


6046. Demonstrate due diligence reasonable effort. If the marketplace facilitator demonstrates to the satisfaction of the department that the marketplace facilitator has made a reasonable effort to obtain accurate and complete information from an unrelated marketplace seller about a retail sale and that the failure to remit the correct amount of taxes or fees imposed under this part, or under any other law that imposes a fee administered pursuant to Part 30 (commencing with Section 55001), was due to incorrect or incomplete information provided to the marketplace facilitator by the unrelated marketplace seller, then the marketplace facilitator shall be relieved of liability for the taxes or fees for that retail sale. This section does not apply with regard to a retail sale for which the marketplace facilitator is the retailer selling or making the sale of the tangible personal property on its own behalf or if the marketplace facilitator and marketplace seller are related. Where a marketplace facilitator is relieved of liability for the taxes or fees on a retail sale under this section, the marketplace seller is the retailer for that retail sale.

History—Added by Stats. 2019, Ch. 5 (AB 147), in effect April 25, 2019, operative October 1, 2019. Amended by Stats. 2021, Ch. 421 (1402), in effect January 1, 2022, replaced "tax" with "taxes or fees" throughout the paragraph and added ", or under any other law that imposes a fee administered pursuant to Part 30 (commencing with Section 55001)," after "imposed under this part."

Note.—Sec. Section 7, subd. (b) of Stats. 2019, Ch. 5 (AB 147) specifies:

Implementation of Chapter 1.7 (commencing with Section 6040) of Part 1 of Division 2 of the Revenue and Taxation Code and Section 6203.1 of the Revenue and Taxation Code, as both proposed to be added by this act, for the 2019–20 fiscal year, is deemed an emergency and necessary for the immediate preservation of the public peace, health, and safety, or general welfare and, therefore, the California Department of Tax and Fee Administration is hereby authorized to adopt emergency regulations to implement those provisions during the 2019–20 fiscal year, in accordance with the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). Notwithstanding any other law, the emergency regulations adopted by the California Department of Tax and Fee Administration may remain in effect for two years from the date of adoption.


6047. Relief conditions. (a) A marketplace facilitator shall be relieved of the taxes or fees on retail sales facilitated through its marketplace as provided in subdivision (c) if the marketplace facilitator demonstrates to the satisfaction of the department all of the following:

(1) The retail sales were facilitated for a marketplace seller prior to January 1, 2023, through a marketplace of the marketplace facilitator.

(2) The marketplace facilitator is not the marketplace seller.

(3) The marketplace facilitator and the marketplace seller are not related.

(4) The failure to collect sales and use tax or any other fee administered pursuant to Part 30 (commencing with Section 55001) was due to a good faith error other than an error in sourcing the sale pursuant to the Transactions and Use Tax Law (Part 1.6 (commencing with Section 7251)) or any other law that imposes a fee administered pursuant to Part 30 (commencing with Section 55001).

(b) To the extent that a marketplace facilitator is relieved of liability for collection of sales and use tax or any other fee administered pursuant to Part 30 (commencing with Section 55001) under this section, the marketplace seller for whom the marketplace facilitator has facilitated the retail sale is also relieved of liability, unless the marketplace seller is the retailer for those retail sales pursuant to Section 6046. The department may determine the manner in which a marketplace facilitator or marketplace seller shall claim the liability relief provided in this section.

(c) The liability relief provided under this section shall not exceed the following percentage of the sum of all sales and use tax and any other fee administered pursuant to Part 30 (commencing with Section 55001) due on sales facilitated by a marketplace facilitator for marketplace sellers, which sales shall not include sales by the marketplace facilitator or persons related to the marketplace facilitators:

(1) For sales facilitated during the fourth quarter of 2019 or during the 2020 calendar year, 7 percent.

(2) For sales facilitated during the 2021 calendar year, 5 percent.

(3) For sales facilitated during the 2022 calendar year, 3 percent.

(d) Nothing in this section shall be construed to relieve any person of liability for collecting but failing to remit to the department sales and use tax or any other fee administered pursuant to Part 30 (commencing with Section 55001).

History—Added by Stats. 2019, Ch. 5 (AB 147), in effect April 25, 2019, operative October 1, 2019. Amended by Stats. 2021, Ch. 421 (1402), in effect January 1, 2022 replaced "tax" with "taxes or fees" in the first subdivision (a); added "or any other fee administered pursuant to Part 30 (commencing with Section 55001)" after "failure to collect sales and use tax" and added "or any other law that imposes a fee administered pursuant to Part 30 (commencing with Section 55001)" after "(commencing with Section 7251)" in subdivision (a)(4); added "or any other fee administered pursuant to Part 30 (commencing with Section 55001)" after "liability for collection of sales and use tax" in subdivision (b); replaced "total" with "sum of all," and added "any other fee administered pursuant to Part 30 (commencing with Section 55001)" before and after "sales and use tax," respectively in subdivision (c); and added "or any other fee administered pursuant to Part 30 (commencing with Section 55001)" at the end of subdivision (d).

Note.—Sec. Section 7, subd. (b) of Stats. 2019, Ch. 5 (AB 147) specifies:

Implementation of Chapter 1.7 (commencing with Section 6040) of Part 1 of Division 2 of the Revenue and Taxation Code and Section 6203.1 of the Revenue and Taxation Code, as both proposed to be added by this act, for the 2019–20 fiscal year, is deemed an emergency and necessary for the immediate preservation of the public peace, health, and safety, or general welfare and, therefore, the California Department of Tax and Fee Administration is hereby authorized to adopt emergency regulations to implement those provisions during the 2019–20 fiscal year, in accordance with the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). Notwithstanding any other law, the emergency regulations adopted by the California Department of Tax and Fee Administration may remain in effect for two years from the date of adoption.


Article 4. Operative Date


6049.5. Operative date of article. (a) This chapter shall become operative on October 1, 2019.

(b) The provisions of this chapter are severable. If any provision of this chapter or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.

History—Added by Stats. 2019, Ch. 5 (AB 147), in effect April 25, 2019, operative October 1, 2019.

Note.—Sec. Section 7, subd. (b) of Stats. 2019, Ch. 5 (AB 147) specifies:

Implementation of Chapter 1.7 (commencing with Section 6040) of Part 1 of Division 2 of the Revenue and Taxation Code and Section 6203.1 of the Revenue and Taxation Code, as both proposed to be added by this act, for the 2019–20 fiscal year, is deemed an emergency and necessary for the immediate preservation of the public peace, health, and safety, or general welfare and, therefore, the California Department of Tax and Fee Administration is hereby authorized to adopt emergency regulations to implement those provisions during the 2019–20 fiscal year, in accordance with the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code). Notwithstanding any other law, the emergency regulations adopted by the California Department of Tax and Fee Administration may remain in effect for two years from the date of adoption.