Bill Text: CA AB155 | 2015-2016 | Regular Session | Introduced
Bill Title: Sales tax: exemption: food products: vending machines.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Failed) 2016-02-01 - From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB155 Detail]
Download: California-2015-AB155-Introduced.html
BILL NUMBER: AB 155 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Dababneh
JANUARY 16, 2015
An act to amend Sections 6359 and 6359.45 of, to repeal Section
6359.4 of, and to repeal and add Section 6359.2, of the Revenue and
Taxation Code, relating to taxation, to take effect immediately, tax
levy.
LEGISLATIVE COUNSEL'S DIGEST
AB 155, as introduced, Dababneh. Sales tax: exemption: food
products: vending machines.
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.
That law provides various exemptions from that tax, including an
exemption for food products, as specified. Existing law excludes food
products from this exemption when certain conditions are met,
including when the food products are sold through a vending machine.
Existing law, however, provides a partial exemption from that tax for
certain food products actually sold through a vending machine.
This bill would, on and after January 1, 2016, exempt from that
tax the gross receipts of any retailer from the sale at retail of
food products actually sold through a vending machine, and would make
other conforming changes.
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 law authorizes
districts, as specified, to impose transactions and use taxes in
accordance with the Transactions and Use Tax Law, which conforms to
the Sales and Use Tax Law. Amendments to state sales and use taxes
are incorporated into these laws.
The amendments made by this bill would be incorporated into these
laws.
Section 2230 of the Revenue and Taxation Code provides that the
state will 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.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 6359 of the Revenue and Taxation Code is
amended to read:
6359. (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, food products for human consumption.
(b) For the purposes of this section, "food products" include all
of the following:
(1) Cereals and cereal products, oleomargarine, meat and meat
products, fish and fish products, eggs and egg products, vegetables
and vegetable products, fruit and fruit products, spices and salt,
sugar and sugar products, candy, gum, confectionery, coffee and
coffee substitutes, tea, and cocoa and cocoa products.
(2) Milk and milk products, milkshakes, malted milks, and any
other similar type beverages that are composed at least in part of
milk or a milk product and that require the use of milk or a milk
product in their preparation.
(3) All fruit juices, vegetable juices, and other beverages,
whether liquid or frozen, including bottled water, but excluding
spirituous, malt, or vinous liquors or carbonated beverages.
(c) For purposes of this section, "food products" do not include
medicines and preparations in liquid, powdered, granular, tablet,
capsule, lozenge, and pill form sold as dietary supplements or
adjuncts.
(d) None of the exemptions in this section apply to any of the
following:
(1) When the food products are served as meals on or off the
premises of the retailer.
(2) When the food products are furnished, prepared, or served for
consumption at tables, chairs, or counters or from trays, glasses,
dishes, or other tableware whether provided by the retailer or by a
person with whom the retailer contracts to furnish, prepare, or serve
food products to others.
(3) When the food products are ordinarily sold for immediate
consumption on or near a location at which parking facilities are
provided primarily for the use of patrons in consuming the products
purchased at the location, even though those products are sold on a
"take out" or "to go" order and are actually packaged or wrapped and
taken from the premises of the retailer.
(4) When the food products are sold for consumption within a
place, the entrance to which is subject to an admission charge,
except for national and state parks and monuments, marinas,
campgrounds, and recreational vehicle parks.
(5) When the food products are sold through a vending machine.
(6)
(5) When the food products sold are furnished in a form
suitable for consumption on the seller's premises, and both of the
following apply:
(A) Over 80 percent of the seller's gross receipts are from the
sale of food products.
(B) Over 80 percent of the seller's retail sales of food products
are sales subject to tax pursuant to paragraph (1), (2), (3), or
(7) (6) .
(7)
(6) When the food products are sold as hot prepared
food products.
(e) "Hot prepared food products," for the purposes of paragraph
(7) (6) of subdivision (d), include a
combination of hot and cold food items or components where a single
price has been established for the combination and the food products
are sold in combination, such as a hot meal, a hot specialty dish or
serving, a hot sandwich, or a hot pizza, including any cold
components or side items. Paragraph (7) (6)
of subdivision (d) does not apply to a sale for a separate
price of bakery goods or beverages (other than bouillon, consommé, or
soup), or where the food product is purchased cold or frozen; "hot
prepared food products" means those products, items, or components
that have been prepared for sale in a heated condition and that are
sold at any temperature that is higher than the air temperature of
the room or place where they are sold.
(f) Notwithstanding paragraph (6) (5)
of subdivision (d), if the seller elects to separately account
for sales of food products specified in subdivision (b), then the
gross receipts from the sale of those food products shall be exempt
under subdivision (a), provided that the separate accounting is fully
documented in the seller's records. However, if the seller's records
do not reflect the separate accounting of the gross receipts from
sales of nontaxable food products, the seller's election under this
subdivision shall be revoked.
SEC. 2. Section 6359.2 of the Revenue and Taxation Code is
repealed.
6359.2. (a) Except as otherwise provided in Sections 6359.4,
6359.45, 6363, and 6370, for the year beginning on January 1, 1988,
and ending on December 31, 1988, 77 percent of the gross receipts of
any retailer from the sale at retail of food products shall be
subject to the tax imposed by Section 6051, when those food products
are actually sold through a vending machine.
(b) Except as otherwise provided in Sections 6359.4, 6359.45,
6363, and 6370, for the year beginning on January 1, 1989, and ending
on December 31, 1989, 55 percent of the gross receipts of any
retailer from the sale at retail of food products shall be subject to
the tax imposed by Section 6051, when those food products are
actually sold through a vending machine.
(c) Except as otherwise provided in Sections 6359.4, 6359.45,
6363, and 6370, for the year beginning on January 1, 1990, and
thereafter, 33 percent of the gross receipts of any retailer from the
sale at retail of food products shall be subject to the tax imposed
by Section 6051, when those food products are actually sold through a
vending machine.
(d) (1) The Legislature finds that 33 percent represents the
statewide average of food products sold through vending machines
which are subject to the tax imposed under this part. Therefore, the
Legislature establishes this average as the measure of the tax with
respect to vending machine sales to simplify tax auditing procedures
and to provide for uniformity in the taxation of gross receipts
derived from the sale of food products through vending machines.
(2) The Legislature also finds that due to fiscal constraints, it
is necessary to phase in the partial exemption for sales made through
vending machines in the 1988 and 1989 calendar years.
(e) For purposes of this section, "food products" includes hot
coffee, hot tea, and hot chocolate, when those hot beverages are
actually sold through a vending machine for a separate price. "Food
products" does not include other hot prepared food products, as
defined in Section 6359.
SEC. 3. Section 6359.2 is added to the Revenue and Taxation Code,
to read:
6359.2. (a) On and after January 1, 2016, there are exempted from
the taxes imposed by this part, the gross receipts of any retailer
from the sale at retail of food products actually sold through a
vending machine.
(b) For purposes of this section, "food products" means food
products as defined in Section 6359, and includes hot coffee, hot
tea, and hot chocolate, when those hot beverages are actually sold
through a vending machine for a separate price. "Food products" does
not include other hot prepared food products, as defined in Section
6359.
SEC. 4. Section 6359.4 of the Revenue and Taxation Code is
repealed.
6359.4. (a) Any vending machine operator is a consumer of, and
shall not be considered a retailer of, food products which sell at
retail for fifteen cents ($0.15) or less and which are actually sold
through a vending machine.
(b) Notwithstanding subdivision (a), any vending machine operator
is a consumer of, and shall not be considered a retailer of, food
products, other than beverages or hot prepared food products, which
are sold through a coin-operated bulk vending machine if the amount
of each sale is twenty-five cents ($0.25) or less. For purposes of
this subdivision, "bulk vending machine" means a vending machine
containing unsorted food products, other than beverages or hot
prepared food products which, upon insertion of a coin, dispenses
those food products, including candy and confectionery, in
approximately equal portions, at random, and without selection by the
customer.
SEC. 5. Section 6359.45 of the Revenue and Taxation Code is
amended to read:
6359.45. (a) Any vending machine operator which is a nonprofit,
charitable, or educational organization is a consumer of, and shall
not be considered a retailer of, tangible personal property which
sells at retail for fifteen cents ($0.15) or less and which is
actually sold through a vending machine.
(b) Any library district, municipal library, or county library and
any vendor making sales pursuant to a contract with a library
district, municipal library, or county library is a consumer of, and
shall not be considered a retailer of, photocopies which it sells at
retail and which are actually sold through a coin-operated copy
machine located at a library facility.
(c) This section shall not apply to any vending machine operator
which is a nonprofit, charitable, or educational organization that is
a retailer of tangible personal property that is a food product as
defined in subdivision (b) of Section 6359.4, and which is actually
sold through a vending machine.
SEC. 6. 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. 7. This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.
