The State of California is firmly under control of the regulation of charitable sales promotions with its new law AB 488 which was passed in October 2021 and will come into effect on January 1, 2023 (to allow the attorney general’s office to enact regulations). regulations to implement the new law).
What you need to know (so far)
Charitable Sales Promotions (CCV):
A business does not need to register a CCV in California as long as (i) it has a written contract with the charity with certain 90-day payment terms; (ii) it returns the funds to the charity on an ongoing 90-day basis and (iii) it provides accounting with each payment.
Under AB 488:
- Online Promotions: A business must register in California as a “charitable fundraising platform” for CCVs conducted online, in whole or in part, when they benefit more than 6 charities during the course of a calendar year.
- In-store promotions only: existing CCV laws apply. No registration is necessary if a business complies with the above contractual / payment / accounting requirements.
Donation upon departure:
Rounding programs (i.e. rounding your bill to the next dollar to donate to charity at the caisse), donation boxes at the caisse, etc. are generally not regulated until the merchant is paid for their efforts, keeps no donations, and returns donations to the charity promptly.
Under AB 488:
- Online: A merchant must register as a “charitable fundraising platform”.
- In-store only: CA has indicated that it may treat retailers as charitable “trustees” under the CAL. Government code 12582 (b) and requires registration.