BRISBANE (KCBS) – Brisbane-based is being investigated by state officials over whether it is responsible for collecting state sales taxes for items sold on the site from a third-party retailer.

The items in question are sold on but come from CSN Stores in Boston. Walmart said it only collects taxes for the vendors upon their request.

But state Board of Equalization member Betty Yee said her staff is looking into whether Walmart and CSN’s relationship falls under the criteria of California’s new so-called “Amazon tax,” which took effect on July 1.

KCBS’ Anna Duckworth Reports:

“I would think that Walmart, being the largest in-state retailer, is very concerned about any skirting of the new law and they would be informing their out-of-state retailers that they may have an obligation to collect and pay taxes,” Yee said.

The new law requires that online retailers collect taxes from items sold to California state residents. Amazon is among those challenging the legislation, arguing that a lack of a brick-and-mortar presence in the state is enough of a legal reason to not collect the millions in taxes.

But Richard Pomp, a state tax expert at the University of Connecticut, said Walmart’s case is different, with much of the sales processing, billing and order taking being done in another state.

“It’s not good enough that be in California,” Pomp said. “We have to look to see where the activity associated with the sales takes place.”

Yee said she hopes the Board of Equalization can come to a decision within the next week on whether Walmart is responsible for collecting the sales tax.

(Copyright 2011 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)


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