After a series of scandals spurred lawmakers to gut the Board of Equalization in 2017, many Sacramento observers feared the newly formed agencies that would take over most of the board’s tasks would be a different sort of animal. The BOE may have an Orwellian name – all taxpayers are equal, but some are more equal than others! – but as the nation’s only tax-collection board run by elected officials, it operated in a relatively taxpayer-friendly manner.

We’ve already gotten a whiff of the change in attitude. BOE’s elected members, mindful of constituent concerns and higher office, would regularly side with businesses filing tax appeals. Under the current system, however, taxpayers rarely prevail. Now an online tax-collection dispute is confirming our worst fears, as the newly created California Department of Tax and Fee Administration (CDFTA) pursues tax collections in an inappropriately aggressive manner. Apparently, this new animal is a pit bull.

The issue hearkens back to the U.S. Supreme Court’s 2018 Wayfair decision, which allowed states to collect sales taxes from online retailers even if they don’t operate physically in the state. This has led to uncertainty among Web-based businesses, and disputes over who is responsible for tabulating and paying taxes in the nation’s myriad jurisdictions.

Enter California’s CDFTA, which now “is pursuing up to eight years of unpaid back taxes from users of Fulfillment by Amazon (FBA) services when selling items through Amazon Marketplace, claiming that Amazon’s fulfillment centers constitute physical nexus in California,” according to a report from TechRepublic. But it’s a stretch to argue that a mom-and-pop business in Kansas had a physical presence in California because a fulfillment company temporarily stored some of that Midwestern firm’s products in a warehouse here.

Clearly, California’s tax agency wants the extra money. Nevertheless, it shouldn’t advocate such an envelope-pushing justification, or force kitchen-table businesses into bankruptcy, or demand that Amazon hand over the private information of these small companies. Furthermore, as TechRepublic added, the agency “is demanding that sellers obtain permits to sell in California, informing sellers that failing to ‘voluntarily comply’ with registration ‘can be prosecuted’ for a felony, punishable by up to three years in prison, and/or fines.” Nice, huh?

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Newsom should sign bill granting civilian oversight of sheriff’s departments The article did point to some encouraging news. California Treasurer Fiona Ma, who is a former Board of Equalization member, sent a hard-hitting letter to Gov. Gavin Newsom asking that he halt the tax agency’s “unconstitutional and impractical” actions. Ma quoted from a small-business owner who was “distraught and frightened” from the notice she received and also expressed concern about what the agency is doing to women- and minority-owned enterprises.

Treasurer Ma notes that “online retail platform providers typically do not allow these third-party sellers to retain customer information,” which renders pointless California’s demand for such information. She also argues that third-party sellers should not be considered to have a physical presence in California because they had no control over where their inventory was stored. That was up to the online retailer. Good points.

Let’s hope Newsom joins Ma and sides with taxpayers against an agency that needs to have its chain yanked. We know the state wants revenue. But with the BOE gutted, someone at least needs to stand up for the fair treatment of taxpayers.