Bill Text: CA AB1702 | 2021-2022 | Regular Session | Amended

California Assembly Bill 1702 (Prior Session Legislation)

Bill Title: Sales and Use Tax Law: exemptions: COVID-19 prevention and response goods.

Spectrum: Strong Partisan Bill (Democrat 11-1)

Status: (Introduced - Dead) 2022-03-23 - Re-referred to Com. on REV. & TAX. [AB1702 Detail]

Download: California-2021-AB1702-Amended.html

Amended IN Assembly March 22, 2022

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill

No. 1702

Introduced by Assembly Member Levine
(Principal coauthor: Assembly Member Mia Bonta)
(Coauthors: Assembly Members Eduardo Garcia, Lee, Low, Mathis, Nazarian, Robert Rivas, and Villapudua)
(Coauthors: Senators Newman, Umberg, and Wiener)

January 26, 2022

An act to add and repeal Section 6363.1 of the Revenue and Taxation Code, relating to taxation, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL'S DIGEST

AB 1702, as amended, Levine. Sales and Use Tax Law: exemptions: COVID-19 prevention and response goods.

Existing sales and use tax laws impose taxes on retailers measured by the gross receipts from the sale of tangible personal property sold at retail in this state, or on the storage, use, or other consumption in this state of tangible personal property purchased from a retailer for storage, use, or other consumption in this state, and provides various exemptions from the taxes imposed by those laws.

This bill would exempt from those taxes, until January 1, 2025, the gross receipts from the sale of, and the storage, use, or other consumption of, COVID-19 prevention and response goods, as defined.

Existing law requires a bill that would authorize a new tax expenditure under the Sales and Use Tax Law to identify specific goals, purposes, and objectives that the tax expenditure will achieve, and detailed performance indicators and data collection requirements for determining whether the tax expenditure achieves these goals, purposes, and objectives.

This bill would make findings specifying the goal, purpose, and objective of the sales and use tax exemption provided by this bill and the performance indicator to be used, and would require, on or before January 1, 2026, the California Department of Tax and Fee Administration to provide a report to the Assembly Revenue and Taxation Committee and the Senate Governance and Finance Committee on the use of the tax exemption.

The Bradley-Burns Uniform Local Sales and Use Tax Law authorizes counties and cities to impose local sales and use taxes in conformity with the Sales and Use Tax Law, and existing laws authorize districts, as specified, to impose transactions and use taxes in accordance with the Transactions and Use Tax Law, which generally conforms to the Sales and Use Tax Law. Amendments to the Sales and Use Tax Law are automatically incorporated into the local tax laws.

Existing law requires the state to reimburse counties and cities for revenue losses caused by the enactment of sales and use tax exemptions.

This bill would provide that, notwithstanding Section 2230 of the Revenue and Taxation Code, no appropriation is made and the state shall not reimburse any local agencies for sales and use tax revenues lost by them pursuant to this bill.

This bill would declare that it is to take effect immediately as an urgency statute.

Vote: 2/3 Appropriation: NO Fiscal Committee: YES Local Program: NO

The people of the State of California do enact as follows:

SECTION 1.

Section 6363.1 is added to the Revenue and Taxation Code, to read:

6363.1.

(a) There are exempted from the taxes imposed by this part the gross receipts from the sale in this state of, and the storage, use, or other consumption in this state of, COVID-19 prevention and response goods.

(b) For purposes of this section:

(1) “At-home COVID-19 test kit” shall mean a kit that is authorized by the United States Food and Drug Administration, or under the United States Food and Drug Administration’s Emergency Use Authorization.
~~(1)~~

(2) “COVID-19 prevention and response goods” means high-quality face masks and at-home COVID-19 test kits.

~~(2)A “high-quality~~

(3) “High-quality face mask” shall mean a mask that is included on a list of masks on the internet website for the federal Centers for Disease Control and Prevention and is either:

(A) A face mask that meets the ASTM International Barrier Face Covering standard (standard number F3502-21.)

(B) A particulate filtering facepiece respirator approved by the National Institute for Occupational Safety and Health.

SEC. 2.

(a) For the purposes of complying with Section 41 of the Revenue and Taxation Code, the Legislature finds and declares the following:

(1) The goal, purpose, or objective of Section 6363.1 of the Revenue and Taxation Code, as added by this act, hereafter “tax exemption,” is to relieve the financial burden of Californians purchasing items necessary to slowing the spread of COVID-19.

(2) The performance indicator for the Legislature to use when measuring whether the tax exemption meets the goal, purpose, or objective specified in paragraph (1) is the number of sales made that qualified for the tax exemption.

(b) On or before January 1, 2026, the California Department of Tax and Fee Administration shall provide a report to the Assembly Revenue and Taxation Committee and the Senate Governance and Finance Committee on the number of sales that qualified for the exemption and the dollar amount of sales and use taxes foregone based on the tax exemption. The report shall be provided in compliance with Section 9795 of the Government Code.

SEC. 3.

Notwithstanding Section 2230 of the Revenue and Taxation Code, no appropriation is made by this act and the state shall not reimburse any local agency for any sales and use tax revenues lost by it under this act.

SEC. 4.

This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:

In order to slow the spread of COVID-19 and to provide essential support for Californians struggling financially during this pandemic, it is necessary that this act take immediate effect.