Bill Text: CA AB2365 | 2015-2016 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Sales and use taxes: exclusion: pawnbrokers: transfer of vested property.

Spectrum: Slight Partisan Bill (Republican 2-1)

Status: (Vetoed) 2016-08-30 - Consideration of Governor's veto pending. [AB2365 Detail]

Download: California-2015-AB2365-Amended.html

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BILL NUMBER: AB 2365	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 18, 2016

INTRODUCED BY   Assembly Member Gipson
   (Coauthors: Assembly Members Brough and Wagner)

                        FEBRUARY 18, 2016

    An act relating to taxation.   An act to add
Section 6010.15 to the Revenue and Taxation Code, relating to
taxation, to take effect immediately, tax levy. 


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2365, as amended, Gipson.  Sales and use tax exemption.
  Sales and use taxes: exclusion: pawnbrokers: transfer
of vested property. 
   Existing sales and use tax laws impose a tax 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.
 Existing law provides various exemptions from the taxes
imposed by those laws.   Existing law defines "sale" and
"purchase" for these purposes and provides certain exclusions from
those definitions. 
   Existing law regulates pawnbrokers by, among other things,
requiring every loan made by a pawnbroker for which goods are
received in pledge as security to be evidenced by a written contract,
a copy of which is required to be furnished to the pledgor. Existing
law requires the loan period of a loan contract to be no less than 4
months, and requires the loan contract to set forth the loan period,
the date on which the loan is due and payable, and to clearly inform
the pledgor of his or her right to redeem the pledge during the loan
period. Existing law provides procedures by which a pawnbroker may
 foreclose on   become vested with the title to
 pledged property. 
   This bill would declare the intent of the Legislature to enact
legislation that would provide an exemption from sales and use taxes
if an original pledgor reacquires from a pawnbroker tangible personal
property he or she pledged to the pawnbroker as security for a loan
within six months after title to the property is vested in the
pawnbroker.  
   This bill would provide that "sale" and "purchase" do not include
the transfer of vested property, as defined, by a pawnbroker to a
person who pledged the property to the pawnbroker as security for a
loan if specified requirements are met, thus excluding that transfer
from imposition of sales and use tax.  
   The Bradley-Burns Uniform Local Sales and Use Tax Law authorizes
cities and counties to impose local sales and use taxes in conformity
with the Sales and Use Tax Law, and existing law authorizes
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 state sales and
use taxes are incorporated into these laws.  
   Existing law requires the state to reimburse cities and counties
for revenue losses caused by the enactment of sales and use tax
exemptions.  
   This bill would provide that, notwithstanding those provisions, no
appropriation is made and the state shall not reimburse cities and
counties 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:  no
  yes  . State-mandated local program: no.


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

   SECTION 1.    Section 6010.15 is added to the 
 Revenue and Taxation Code   , to read:  
   6010.15.  (a) "Sale" and "purchase" for the purposes of this part
do not include the transfer of title to vested property by a
pawnbroker to a person who pledged the property to the pawnbroker as
security for a loan and from whom title to the property transferred
to the pawnbroker pursuant to Section 21201 of the Financial Code, if
both of the following requirements are met:
   (1) The transfer occurs no more than six months after title to the
property transferred to the pawnbroker from the person pursuant to
Section 21201 of the Financial Code.
   (2) As consideration for the transfer of the property, the person
is required to pay the pawnbroker only the remaining unpaid balance
of the amount borrowed under the loan as of the date the pawnbroker
becomes vested with title to the property, together with one of the
following:
   (A) For an original loan amount not exceeding two thousand four
hundred ninety-nine dollars and ninety-nine cents ($2,499.99),
charges and interest due under the loan pursuant to Chapter 2
(commencing with Section 21200) of Division 8 of the Financial Code,
from the date the pawnbroker is vested with title to the property to
the date of the transfer to the person who pledged the property.
    (B) For an original loan amount of two thousand five hundred
dollars ($2,500) or more, charges and interest due in accordance with
the last monthly contractual interest rate, from the date the
pawnbroker is vested with title to the property until the date of the
transfer to the person who pledged the property.
   (b) As used in this section:
   (1) "Pawnbroker" has the meaning described in Section 21000 of the
Financial Code.
   (2) "Vested property" has the meaning described in subdivision (b)
of Section 21002 of the Financial Code. 
   SEC. 2.    Notwithstanding Section 2230 of the
Revenue and Taxation Code, no appropriation is made by this act and
the state shall not reimburse cities and counties for any sales and
use tax revenues lost by them under this act. 
   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.    It is the intent of the Legislature
to enact legislation that would provide an exemption from sales and
use taxes if an original pledgor reacquires from a pawnbroker
tangible personal property he or she pledged to the pawnbroker as
security for a loan within six months after title to the property is
vested in the pawnbroker.