“Beginning September 15, 2012, a new law takes effect (Stats. 2011, ch. 313 (AB 155) that expands the types of out-of-state retailers required to register with the California State Board of Equalization (BOE) and requires them to begin collecting and remitting use tax on sales of tangible personal property to California consumers. The law applies to out-of-state retailers that have substantial nexus with California consumers. This includes any out-of-state retailer that has sold more than $1 million to California consumers in the past year and has had more than $10,000 in sales referred by an affiliate operating in California.”
Fortunately, for now, Amazon and other out of state retailers need not collect Hawaii use tax. So far Hawaii lawmakers have been unable or unwilling to impose the taxes on out of state retailers such as Amazon. However, comments made at a recent Hawaii State Bar Association Tax Section meeting by Johnell Nakamura, of Cades Schutte, former Hawaii Department of Taxation Rules Officer, suggested that there were some in the Department that feel that Hawaii should tax out of state retailers based on an “economic nexus” theory such that physical nexus with the state would no longer be required. Current Rules Officer at the Department, Kevin Wakayama, did not dispute that statement, although it was unclear as to his true stance on the issue.