State seeks to make delivery platforms 'marketplace facilitators' to reduce sales-tax confusion

The California Department of Tax and Fee Administration proposed making delivery network companies (DNCs) — such as DoorDash and Uber Eats — marketplace facilitators under state sales-tax rules, which would make those platforms responsible for collecting and remitting sales tax on facilitated transactions.

"This proposal would make all delivery network companies a marketplace facilitator alleviating the confusion and improving compliance," CDTFA's Brad Miller said, explaining that restaurants sometimes fail to report sales made through delivery platforms because of uncertainty about which party is remitting tax.

CDTFA estimated the change could yield roughly $44,000,000 in sales-tax revenue over a full fiscal year, of which about $20,000,000 would be general-fund revenue. Agency staff noted the change would also bring service fees charged by some platforms into taxable gross receipts where applicable, though transportation charges (delivery fees passed to drivers) would remain exempt under current law.

Members questioned whether the proposal effectively raises costs for consumers and whether it creates new mandates for small, family-owned restaurants that use delivery to compete. Department of Finance and CDTFA representatives said the primary goal is clarity and parity with other states, but acknowledged the ultimate impact on consumer prices will depend on how individual DNCs and restaurants structure fees.

No public commenters spoke in favor or opposition at the close of that item. The committee did not take action but solicited clarifying information on compliance burdens and revenue estimates for the May revision.