Now: California Sales Tax Change for Marketplaces

You may have heard of a recent change to the California state statute for 3rd Party Marketers and wineries using their services. Essentially, the obligation to collect and remit sales tax for sales to consumers using 3rd Party Marketers will now shift from the winery “seller” to the marketplace.  This means our marketplace partners will start remitting California sales tax for orders originating from their platform. Vivino will be starting that remittance effective May 1st, so we are outlining a couple of simple steps for orders to ensure tax collection continues to run smoothly

Tax Disbursement

As part of our monthly disbursement process, WineDirect will be disbursing the sales tax amounts to our partners (ie. Vivino) and no longer passing those onto the winery, specifically only for California destination orders. You will see this in the form of a debit as a part of your statements, so that the tax amount is deducted from our total disbursement amount.

Tax Reporting with ShipCompliant Integration

Since our partners will remit California taxes on sales to consumers made through their platforms, you will need to ensure that these California destination orders are not included within your California reports. 

For wineries integrated with ShipCompliant this will require changing the status of the orders in ShipCompliant, from ‘Shipped’ to ‘In Process’, and the removal of the tracking number on those same orders. We have confirmed this with ShipCompliant's support as the best way to exclude those orders from your tax forms. This can be done either one by one in the ShipCompliant portal, or in bulk. The bulk option is by downloading the orders in ShipCompliant, changing their status & removing tracking numbers, and then reuploading the file. This update would need to occur the first of the month to effect prior month.

We will be working to automate this step, so you will not have to take these actions in the future.  We will keep everyone updated once timing for this automation has been determined.

Tax Reporting for those WITHOUT ShipCompliant Integration

Since our partners will remit California taxes on sales to consumers made through their platforms, you will need to ensure that these California destination orders are not included within your California reports.

For wineries that use one of the reports or obtain the data via an integration for your compliance filing, your compliance expert will have all the data that they need to determine how to deal with those orders.  While not exclusive, some possibilities are simply to delete the California orders, or bulk upload all the orders and then modify California orders so they do not count towards the tax calculation.  This process would need to be completed by the first of each month to effect prior month.

We would recommend that you talk to your compliance expert prior to taking any action in order to cover additional details that may be required.