Bill Text: CA AB1218 | 2011-2012 | Regular Session | Amended

California Assembly Bill 1218 (Prior Session Legislation)

Bill Title: Income taxes: disallowance of deductions: advertising:

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2012-02-01 - Died pursuant to Art. IV, Sec. 10(c) of the Constitution. From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB1218 Detail]

Download: California-2011-AB1218-Amended.html

BILL NUMBER: AB 1218	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 7, 2011

INTRODUCED BY   Assembly Member Pan

                        FEBRUARY 18, 2011

    An act to amend Section 6093 of the Revenue and Taxation
Code, relating to taxation.   An act to add Sections
17290 and 24430 to the Revenue and Taxation Code, relating to
taxation, to take effect imm   ediately, tax levy. 


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1218, as amended, Pan.  Sales and use tax. 
 Income taxes: disallowance of deductions: advertising: tobacco.
 
   The Personal Income Tax Law and Corporation Tax Law allow
deductions for various expenditures in computing taxable or net
income, including, with certain exceptions, all ordinary and
necessary expenses paid or incurred during the taxable and income
year in carrying on any trade or business.  
   This bill would provide under both laws that a deduction shall not
be allowed for specified expenses paid or incurred to advertise, as
defined, the sale, use, or consumption of cigarettes or other tobacco
products.  
   This bill would include a change in state statute that would
result in a taxpayer paying a higher tax within the meaning of
Section 3 of Article XIII  A of the California Constitution, and thus
would require for passage the approval of 2/3 of the membership of
each house of the Legislature.  
   This bill would take effect immediately as a tax levy. 

   The Sales and Use Tax Law presumes that all gross receipts are
subject to tax until the contrary is established. This law relieves a
seller from liability for sales tax if the seller in good faith
takes a resale certificate from a purchaser holding a seller's
permit, and the resale certificate is signed and completed as
specified.  
   This bill would make nonsubstantive, technical changes to this
provision. 
   Vote:  majority   2/3  . Appropriation:
no. Fiscal committee:  no   yes  .
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 17290 is added to the 
 Revenue and Taxation Code   , to read:  
   17290.  (a) Notwithstanding any other provision in this part to
the contrary, a deduction shall not be allowed for any expenses paid
or incurred by the taxpayer to advertise the sale, use, or other
consumption of cigarettes or any other tobacco products.
   (b) For purposes of this section:
   (1) "Advertise" includes the use of a newspaper, magazine, or
other publication, book, notice, circular, pamphlet, letter,
handbill, tip sheet, poster, bill, sign, placard, card, label, tag,
window display, store sign, or any other means or methods now or
hereafter employed to sell or promote cigarettes or any other tobacco
products.
   (2) "Advertising" includes all cigarette and tobacco product
advertising done by cigarette or tobacco products manufacturers,
distributors, and retailers.
   (3) "Cigarette" means a cigarette, as defined in Section 30003.
   (4) "Tobacco products" means tobacco products, as defined in
subdivision (b) of Section 30121.
   (c) In cases where the advertising space is shared by several
products, including cigarettes or other tobacco products, the
cigarette or other tobacco product portion of the advertisement shall
be prorated for disallowance of the deduction.
   (d) This section shall not apply to advertising aimed at
discouraging smoking or the use of cigarettes or other tobacco
products. 
   SEC. 2.    Section 24430 is added to the  
Revenue and Taxation Code   , to read:  
   24430.  (a) Notwithstanding Section 24343 or any other provision
in this part to the contrary, in computing business income as defined
in Section 25120, a deduction shall not be allowed for any expenses
paid or incurred by the taxpayer to advertise the sale, use, or other
consumption of cigarettes or any other products containing tobacco.
   (b) For purposes of this section:
   (1) "Advertise" includes the use of a newspaper, magazine, or
other publication, book, notice, circular, pamphlet, letter,
handbill, tip sheet, poster, bill, sign, placard, card, label, tag,
window display, store sign, or any other means or methods now or
hereafter employed to sell or promote cigarettes or any other
products containing tobacco.
   (2) "Advertising" includes all cigarette and tobacco product
advertising done by cigarette or tobacco products manufacturers,
distributors, and retailers.
   (3) "Cigarette" means a cigarette, as defined in Section 30003.
   (4) "Tobacco products" means tobacco products, as defined in
subdivision (b) of Section 30121.
   (c) In cases where the advertising space is shared by several
products, including cigarettes or any other products containing
tobacco, the tobacco portion of the advertisement shall be prorated
for disallowance of the deduction.
   (d) This section shall not apply to advertising aimed at
discouraging smoking or the use of cigarettes or any other products
containing tobacco. 
   SEC. 3.    This act provides for a tax levy within
the meaning of Article IV of the Constitution and shall go into
immediate effect.  
  SECTION 1.    Section 6093 of the Revenue and
Taxation Code is amended to read:
   6093.  The certificate shall be signed by and bear the name and
address of the purchaser, indicate the number of the permit issued to
the purchaser, and indicate the general character of the tangible
personal property sold by the purchaser in the regular course of
business. The certificate shall be substantially in such form as the
board may prescribe.