Drop-Ship Tax Law Challenged
A Wisconsin shoe manufacturer is appealing a California court judgment with implications for all distributors who drop-ship product into California, and possibly even for those who don't. The case, Mason Shoe Mfg. Company v. State Board of Equalization, concerns the application of a California statute designed to collect use taxes on products sold by retailers from outside the state. The statute makes any non-California wholesaler who drop-ships product to a California consumer to fulfill a sale by a non-California retailer responsible for collecting use taxes on the sale.
For example, if a Utah retailer buys product from a South Carolina distributor, makes a sale to a California consumer and has the product drop-shipped to the consumer by that South Carolina ...