This woman was selling children's clothing through Amazon. She sells to California residents less than 20 times per year. California passed a law in 2019 that allows them to demand sales tax RETROACTIVELY from all businesses who sold goods in the state. According to the state of California, because Amazon had a warehouse inside of the state, she should have collected sales tax from those sales, and did not.
The state of California has seized all of this woman's bank account because the 50 or so sales that she made to residents of that state paid no sales tax. This woman almost certainly sold less than $5,000 in merchandise to California residents, so California has decided to take $10,000 of this woman's money.
That is the primary reason why my business is conducted through corporations. It costs $140 a year to maintain a corporation in my state. As soon as I got a demand for ten grand from California for a small retail business with less than $5K in annual sales, I would have had that corporation file Chapter 7 and walked away. However, this poor woman appeared to be doing business as a sole proprietor, and now is going to be out $10,000 because California has run out of its own citizens' money and is extorting it from citizens in other states.
How did they get their grubby fingers into her bank account? I can see the feds doing that, but a state?
ReplyDeleteThis is why you separate out your money. You have a transactional account, then one that only you know about.
I'd be lawyering up big time, and refusing to sell in CA.