Bill Text: CA AB2555 | 2023-2024 | Regular Session | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Sales and use tax: exemption: medicinal cannabis: donations.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2024-09-29 - Chaptered by Secretary of State - Chapter 920, Statutes of 2024. [AB2555 Detail]
Download: California-2023-AB2555-Introduced.html
Bill Title: Sales and use tax: exemption: medicinal cannabis: donations.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2024-09-29 - Chaptered by Secretary of State - Chapter 920, Statutes of 2024. [AB2555 Detail]
Download: California-2023-AB2555-Introduced.html
CALIFORNIA LEGISLATURE—
2023–2024 REGULAR SESSION
Assembly Bill
No. 2555
| Introduced by Assembly Member Quirk-Silva |
February 14, 2024 |
An act to amend Section 6414 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
AB 2555, as introduced, Quirk-Silva.
Sales and use tax: exemption: medicinal cannabis: donations.
Existing law, the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), among other things, consolidates the licensure and regulation of commercial medicinal and adult-use cannabis activities. Existing sales and use tax laws impose use taxes 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, presumes tangible personal property purchased outside the state that is stored, used, or consumed in this state is purchased for use in this state, and provides various exemptions from those taxes.
Existing law exempts from the use tax the storage, use, or other consumption in this state of medicinal cannabis or medicinal cannabis products that are donated, for no consideration, under specified circumstances.
Existing law requires the exemption to apply only if the cannabis retailer certifies in writing, as specified, that the medicinal cannabis or medicinal cannabis product will be used as specified. Existing law makes a licensee that uses the donated medicinal cannabis or medicinal cannabis product in some other manner, or for some other purpose, liable for the payment of use tax and subject to having their license suspended. Existing law repeals these provisions 5 years after the specified operative date.
This bill would extend these provisions indefinitely. By expanding the scope of the crime of perjury, the bill would impose a state-mandated local program.
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.
Existing law requires a bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.
This bill would require the Legislative Analyst’s Office, in order to enable the Legislature to determine whether the use tax exemption provided by the bill is meeting, failing to meet, or exceeding a specified goal and objective, to collect certain data regarding the tax exemption from specified entities, and to submit a report containing the data to the Legislature and the Governor annually each year that the tax exemption is in effect.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
This bill would take effect immediately as
a tax levy.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YESBill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 6414 of the Revenue and Taxation Code is amended to read:6414.
(a) The storage, use, or other consumption in this state of medicinal cannabis or medicinal cannabis product shall be exempt from the use tax in either of the following circumstances:(1) The medicinal cannabis or medicinal cannabis product is donated by a cannabis retailer licensed under Division 10 (commencing with Section 26000) of the Business and Professions Code to a medicinal cannabis patient.
(2) The medicinal cannabis or medicinal cannabis product is donated by a person licensed under Division 10 (commencing with Section 26000) of the Business and Professions Code to a cannabis retailer for subsequent donation to a medicinal cannabis patient.
(b) (1) The exemption specified in subdivision (a) shall apply only if the cannabis retailer certifies in writing
under penalty of perjury to the licensee that donates the medicinal cannabis or medicinal cannabis product, in such a form as the department may prescribe, that the medicinal cannabis and medicinal cannabis product will be used in a manner and for a purpose specified in subdivision (a). The licensee that donates the medicinal cannabis or medicinal cannabis product shall keep a copy of the certification for no less than seven years. The certification in writing shall relieve the licensee that donates the medicinal cannabis or medicinal cannabis product of liability for use tax only if it is taken in good faith.
(2) If a licensee uses the donated medicinal cannabis or medicinal cannabis product in some manner or for some purpose other than those specified in subdivision (a), the licensee shall be liable for the payment of use tax, the measure of tax to the licensee shall be deemed that licensee’s purchase
price for similar product, and the licensee shall be subject to having their license suspended by the Department of Cannabis Control pursuant to Section 26031 of the Business and Professions Code.
(c) “Medicinal cannabis” and “medicinal cannabis product” shall have the same meaning as those terms are defined in Section 26001 of the Business and Professions Code.
(d) “Cannabis retailer” shall have the same meaning as that term is defined in Section 34010.
(e) “Medicinal cannabis patient” shall mean a qualified patient, as defined in Section 11362.7 of the Health and Safety Code, who possesses a physician’s recommendation that complies with Article 25 (commencing with Section 2525) of Chapter 5 of Division 2 of the Business and Professions Code, or a qualified patient or primary caregiver for a qualified patient issued
a valid identification card pursuant to Section 11362.71 of the Health and Safety Code.
(f)(1)This section shall become operative upon completion of the necessary changes to the track and trace program in order to implement the act adding this section, as determined by the Department of Food and Agriculture, or on March 1, 2020, whichever occurs first.
(2)This section shall remain in effect only until five years after it becomes operative, and as of that date is repealed.
SEC. 2.
It is the intent of the Legislature to apply the requirements of Section 41 of the Revenue and Taxation Code to this act. Therefore, the Legislature finds and declares the following with respect to the tax exemption provided by Section 6414 of the Revenue and Taxation Code, as amended by Section 1 of this act:(a) The goal and objective of the tax exemption provided by Section 6414 of the Revenue and Taxation Code, as amended by Section 1 of this act, is to eliminate the tax burden placed on charitable cannabis donations to medicinal cannabis patients in order to minimize the need for those patients to turn to the illicit market in the state. By providing a tax exemption for medicinal cannabis products that are donated to medicinal
cannabis patients, this act is intended to offset other financial burdens that cannabis licensees face that bar them from donating cannabis to medicinal cannabis patients who are unable to afford and access safe and tested cannabis in the legal market.
(b) In order to enable the Legislature to determine whether the tax exemption provided by Section 6414 of the Revenue and Taxation Code, as amended by Section 1 of this act, is meeting, failing to meet, or exceeding the goal and objective specified in subdivision (a), the Legislative Analyst’s Office shall collect data from the California Department of Tax and Fee Administration, the Bureau of Cannabis Control, and the Department of Food and Agriculture, including, but not limited to, data on tax revenue lost, the amount of medicinal cannabis products donated, and the number of medicinal cannabis patients served, as a result of the tax exemptions, as that data becomes available. The California
Department of Tax and Fee Administration, the Bureau of Cannabis Control, and the Department of Food and Agriculture shall make any information requested pursuant to this subdivision available to the Legislative Analyst’s Office. Notwithstanding Section 10231.5 of the Government Code, the Legislative Analyst’s Office shall submit an annual report containing this data to the Legislature and the Governor each year that the tax exemptions are in effect. A report submitted pursuant to this subdivision shall be submitted in compliance with Section 9795 of the Government Code.
