California Surprises Amazon Seller With $1.6 Million Tax Bill

SACRAMENTO, CA — A Philadelphia-area man who works as a third-party seller on Amazon was hit with a shocking $1.6 million tax bill from the state of California — a dramatic example of the state's effort to collect sales tax on purchases made by California residents, the Philadelphia Inquirer reported.

Amazon opened its first California warehouse in 2013, but insisted that it wasn't required by law to collect taxes from sales by third-party vendors, the Inquirer reported.

Since then, though, court rulings around the country have held that retailers like Amazon are, in fact, required to collect those taxes. That's what led to the Pennsylvania man, Brian Freifelder, receiving an unexpected bill saying he owed $1.6 million for taxes he didn't collect from customers during the first six months of 2019 alone.

But some constitutional scholars take issue with California's approach, saying that vendors like Freifelder never received notice that they needed to collect the taxes, according to the Inquirer article.

California tax officials declined to comment on Freifelder's case, the Inquirer reported.