Amended  IN  Assembly  March 04, 2024

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Assembly Bill
No. 2274

Introduced by Assembly Member Dixon
(Coauthors: Assembly Members Alanis, Davies, Flora, Gallagher, Sanchez, and Waldron)

February 08, 2024

An act to add Section 6370.3 to to, and to add and repeal Section 6372 of, the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


AB 2274, as amended, Dixon. Taxation: sales and use taxes: exemption: tax holiday.
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, on and after January 1, 2025, would exempt from those taxes the gross receipts from the sale of, and the storage, use, or other consumption of, any tangible personal property purchased during the first weekend in August, beginning at 12:01 a.m. on Saturday and ending at 11:59 p.m. on Sunday.

Existing law requires a bill that would authorize a new tax exemption under the Sales and Use Tax Law to identify specific goals, purposes, and objectives that the tax exemption 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 include information complying with that requirement.

This bill, until January 1, 2030, would also exempt from those taxes the gross receipts from the sale of, and the storage, use, or other consumption of, qualified school supplies, as defined.
Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.
This bill would include additional information required for any bill authorizing a new tax expenditure.
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 take effect immediately as a tax levy.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 6370.3 is added to the Revenue and Taxation Code, to read:

6370.3.
 (a) Notwithstanding any law, on and after January 1, 2025, there are exempted from the taxes imposed by this part the gross receipts from the sale of, and the storage, use, or other consumption in this state of, any tangible personal property purchased during the first weekend in August, beginning at 12:01 a.m. on Saturday and ending at 11:59 p.m. on Sunday.
(b) (1) For purposes of complying with Section 41, the Legislature finds and declares the following:
(A) The specific goals, purposes, and objectives of this act are:
(i) To ease the financial burden placed on families.
(ii) To incentivize families to continue to make necessary purchases.
(B) The performance indicator for the Legislature to use in determining if the tax exemption achieves the stated goals, purposes, and objectives is the California Department of Tax and Fee Administration’s estimate of utilization of the exemption.
(2) (A) To measure the goals set forth in paragraph (1), the California Department of Tax and Fee Administration shall estimate the utilization of the exemption and report to the Legislature, in compliance with Section 9795 of the Government Code, on its findings. The report shall also provide a recommendation regarding continuation of the exemption to achieve those goals.
(B) The report shall be provided to the Legislature by July 1, 2026, and annually thereafter.
(C) The disclosure requirements of this paragraph shall be treated as an exception to Section 7056.5 of the Revenue and Taxation Code.

SEC. 2.

 Section 6372 is added to the Revenue and Taxation Code, to read:

6372.
 (a) There are exempted from the taxes imposed by this part the gross receipts from the sale of, and the storage, use, or other consumption in this state of, qualified school supplies.
(b) For purposes of this section, “qualified school supplies” means both of the following:
(1) Any of the following items that has a sales price of less than one hundred dollars ($100):
(A) Binders.
(B) Blackboard chalk.
(C) Book bags.
(D) Calculators.
(E) Cellophane tape.
(F) Compasses.
(G) Composition books.
(H) Crayons.
(I) Erasers.
(J) Folders, including expandable, pocket, plastic, and manila folders.
(K) Glue, paste, and paste sticks.
(L) Highlighters.
(M) Index card boxes.
(N) Index cards.
(O) Legal pads.
(P) Lunch boxes.
(Q) Markers, including dry erase markers.
(R) Notebooks.
(S) Paper, including loose-leaf ruled notebook, copy, graph, tracing, manila, colored, and construction paper, and poster board.
(T) Pencil boxes and other school supply boxes.
(U) Pencil sharpeners.
(V) Pencils.
(W) Pens.
(X) Protractors.
(Y) Rulers.
(Z) Scissors.
(AA) Writing tablets.
(2) The first one thousand dollars ($1,000) of the total sales price for any of the following electronic items purchased for noncommercial home or personal use:
(A) Batteries.
(B) Chargers.
(C) Computer mice.
(D) Keyboards.
(E) Laptop cases.
(F) Laptops.
(G) Personal computers.
(H) Printers.
(I) Tablets.
(J) WiFi routers.
(c) (1) For the purposes of complying with Section 41, the Legislature finds and declares the following:
(A) The goal, purpose, or objective of this section is to relieve the financial burden for families and teachers buying school supplies.
(B) The performance indicator for the Legislature to use when measuring whether the tax exemption meets the goal, purpose, or objective is the number of sales made that qualified for the tax exemption.
(2) On or before January 10, 2026, the California Department of Tax and Fee Administration shall provide a report to the Assembly Committee on Revenue and Taxation and the Senate Committee on Revenue and Taxation on the use of the tax exemption. The report shall be provided in compliance with Section 9795 of the Government Code.
(d) This section shall remain in effect only until January 1, 2030, and as of that date is repealed.

SEC. 2.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. 3.SEC. 4.

 This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.