Ernie Klein <eckleinspammenot[at]pacbell.net> wrote:

- quote -

Technically, California has no jurisdiction over merchants
who have no contacts in the state other than sending goods
to customers. But that doesn't stop them from making a
merchant's life miserable if he doesn't cooperate on some
level.

Stu

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- quote -

Could this be an attempt by the State of CA, to approach out
of state merchants, not to tax _them_ or even have them
collect sales tax, but rather to establish a list of
merchants that sell to residents of the state, so that the
state might then pressure those merchants to provide the
names of CA residents so that the state could then bill the
residents for *use* tax? CA has been making lots of noise
lately over the amount of sales tax it _loses_ due to out of
state sales. It smells fishy.

--
-Ernie-

"There are only two kinds of computer users -- those who
have suffered a catastrophic hard drive failure, and those
who will." Have you done your backup today?

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If you do not actually use software in California but only
sell it there, I believe they should not be able to impose
tax on you. I think your answer to that should be "no."

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So it's not on physical storage media in California until
you sell it. Is that right? That's another "no."

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Just selling to people in California does not mean you have
to collect tax from them.

Stu

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- quote -

You misunderstood or didn't read the beginning of my post.
No, my business does not use computer software in
California. I *sell* licenses for software I wrote, and
some of the users who buy those licenses are in California.
I license it *to* others, I am not the licensee.

- quote -

When I sell my computer software, I either ship it on a CD
or I transmit the software electronically to the buyer. So
the answer is "sometimes". Sometimes the buyer wants me to
ship a CD and sometimes they just want it electronically and
I ship nothing physical.

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- quote -

But I have sold software to users in California.

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Sounds like "guilty until proven innocent".

If they did this, they would end up with a net loss. The
tax would probably amount to less than $200.

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"JJ" <jj[at]nospam.com> wrote:

- quote -

It's not a matter of your having set foot in California.
It's a matter of whether you have "purposely availed"
yourself of any benefits of transacting business there. For
example, do you have any sales people or representatives in
California? Do you have or use property in California for
your business? If so, you may well be subject to state
sales tax.

Additionally, some states are getting together to form
compacts that require their citizens to collect sales taxes
from residents of other compact states. I do now know if
California and Pennsylvania have such a compact.

- quote -

Your business uses computer software in California? How and
why?

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held on physical storage media in California???

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This one really doesn't add anything, other than that they
can't tax you if you don't have any sales at all in the
state.

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If you don't answer and California has enough evidence that
allows them to think (reasonably or not) that you owe sales
tax there, they could assess a tax, and possibly even get a
judgment against you. Then they could go to Pennsylvania and
enforce the judgment, whether you are really required to
collect California sales taxes or not.

I'd suggest talking to a tax attorney who is familiar with
these issues, who can evaluate your specific situation and
recomment how best to proceed. (But if you say to him,
"International Shoe" and he says, "huh?" you probably ought
to keep looking.)

Stu

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