An Amazon seller has sued California after the state froze her bank account and seized $2,300 due to uncollected sales tax. Isabel Rubinas, operator of online children's clothing store Lollipop Seeds, argues that California's tax department has unfairly targeted her and other third-party sellers to collect sales taxes before Amazon started collecting them in 2019.
- Last week, Rubinas filed the civil rights lawsuit in federal court in Chicago, close to where she lives. It targets the California Department of Tax and Fee Administration (CDFTA).
- She says California's decision to collect sales tax is "basically going to be the end of my business." In the lawsuit, Rubinas argues that the attempt to crush her store thousands of miles away is "because of what California tax officials did for nearly a decade and now need to clean up – they let Amazon avoid collecting taxes on most sales in Amazon’s store.”
- For years, the CDFTA and state lawmakers pressured Amazon and other e-retailers to collect sales taxes. In 2018, the Supreme Court ruled that states could require outside companies to collect taxes on sales to people who live in their state.
- The Online Merchants Guild, a non-profit trade association, supports Rubinas in the suit. It cited a letter written by California Treasurer Fiona Ma to Gov. Gavin Newsom, which said that such "tax collection is illegal and morally wrong for the state to be going after small businesses that seized the opportunity that Amazon and other online platforms presented.”