In the 2019-2020 regular session of the California State Legislature, SB 531 was introduced to ban local governments from providing sales tax kickbacks to e-commerce businesses for using that jurisdiction as the point of sale.

The bill passed both houses of the legislature, but was vetoed by Governor Gavin Newsom.

[1] The California State Board of Equalization generally requires that online sales be taxed according to a seller's location.

[2] In order to redirect local tax revenues into their own treasuries, cities have created revenue-sharing incentives for companies to use their jurisdictions as the point of sale.

The companies typically receive half of the city's sales tax revenue as a rebate, which is therefore lost from being spent on public services statewide.