Bill Text: CA AB1087 | 2009-2010 | Regular Session | Amended

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

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Bill Title: State Board of Equalization: sales and use taxes:

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Vetoed) 2010-01-14 - Consideration of Governor's veto stricken from file. [AB1087 Detail]

Download: California-2009-AB1087-Amended.html

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BILL NUMBER: AB 1087	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 31, 2009

INTRODUCED BY   Assembly Member Ma

                        FEBRUARY 27, 2009

   An act to amend  Section 401.3   Sections
6011 and 6012  of the Revenue and Taxation Code, relating to
taxation  , to take effect immediately, tax levy  .


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1087, as amended, Ma.  Property taxation: assessment.
  Sales and use taxes: exclusions: transportation
charges.  
   The Sales and Use Tax Law imposes a tax on retailers measured by
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, measured by the
sales price of the property. That law provides various exclusions
from gross receipts and sales price, including an exclusion for
separately-stated charges for transportation from the retailer's
place of business or other point from which shipment is made directly
to the purchaser, as specified.  
   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 the Transactions and Use Tax Law
authorizes districts, as specified, to impose transactions and use
taxes in conformity with the Sales and Use Tax Law. Amendments to the
Sales and Use Tax Law are automatically incorporated into these
laws.  
   This bill would specify that, if the charges for transportation
are not separately stated, or if they are combined with handling or
other charges, that those exclusions from gross receipts and sales
price would not apply and the charges would be included in gross
receipts or sales price.  
   This bill would result in a change in state taxes for the purpose
of increasing state revenues within the meaning of Section 3 of
Article XIII A of the California Constitution, and thus would require
for passage the approval of 2/3 of the membership of each house of
the Legislature.  
   This bill would take effect immediately as a tax levy, but its
operative date would depend on its effective date.  
   Existing law requires the assessor to assess all property subject
to general property taxation on the lien date, as provided. 

   This bill would make a technical, nonsubstantive change to that
provision. 
   Vote:  majority   2/3  . 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 6011 of the   Revenue
and Taxation Code   is amended to read: 
   6011.  (a) "Sales price" means the total amount for which tangible
personal property is sold or leased or rented, as the case may be,
valued in money, whether paid in money or otherwise, without any
deduction on account of any of the following:
   (1) The cost of the property sold.
   (2) The cost of materials used, labor or service cost, interest
charged, losses, or any other expenses.
   (3) The cost of transportation of the property, except as excluded
by other provisions of this section.
   (b) The total amount for which the property is sold or leased or
rented includes all of the following:
   (1) Any services that are a part of the sale.
   (2) Any amount for which credit is given to the purchaser by the
seller.
   (3) The amount of any tax imposed by the United States upon
producers and importers of gasoline and the amount of any tax imposed
pursuant to Part 2 (commencing with Section 7301) of this division.
   (c) "Sales price" does not include any of the following:
   (1) Cash discounts allowed and taken on sales.
   (2) The amount charged for property returned by customers when
that entire amount is refunded either in cash or credit, but this
exclusion shall not apply in any instance when the customer, in order
to obtain the refund, is required to purchase other property at a
price greater than the amount charged for the property that is
returned. For the purpose of this section, refund or credit of the
entire amount shall be deemed to be given when the purchase price
less rehandling and restocking costs are refunded or credited to the
customer. The amount withheld for rehandling and restocking costs may
be a percentage of the sales price determined by the average cost of
rehandling and restocking returned merchandise during the previous
accounting cycle.
   (3) The amount charged for labor or services rendered in
installing or applying the property sold.
   (4) (A) The amount of any tax (not including, however, any
manufacturers' or importers' excise tax, except as provided in
subparagraph (B)) imposed by the United States upon or with respect
to retail sales whether imposed upon the retailer or the consumer.
   (B) The amount of manufacturers' or importers' excise tax imposed
pursuant to Section 4081 or 4091 of the Internal Revenue Code for
which the purchaser certifies that he or she is entitled to either a
direct refund or credit against his or her income tax for the federal
excise tax paid or for which the purchaser issues a certificate
pursuant to Section 6245.5.
   (5) The amount of any tax imposed by any city, county, city and
county, or rapid transit district within the State of California upon
or with respect to retail sales of tangible personal property,
measured by a stated percentage of sales price or gross receipts,
whether imposed upon the retailer or the consumer.
   (6) The amount of any tax imposed by any city, county, city and
county, or rapid transit district within the State of California with
respect to the storage, use or other consumption in that city,
county, city and county, or rapid transit district of tangible
personal property measured by a stated percentage of sales price or
purchase price, whether the tax is imposed upon the retailer or the
consumer.
   (7) Separately stated charges for transportation from the retailer'
s place of business or other point from which shipment is made
directly to the purchaser, but the exclusion shall not exceed a
reasonable charge for transportation by facilities of the retailer or
the cost to the retailer of transportation by other than facilities
of the retailer. However, if the transportation is by facilities of
the retailer, or the property is sold for a delivered price, this
exclusion shall be applicable solely with respect to transportation
which occurs after the purchase of the property is made.  If the
charges for transportation are not separately stated, or if they are
combined with handling or other charges, then this exclusion shall
not apply and those charges for transportation are included in the
sales price. 
   (8) Charges for transporting landfill from an excavation site to a
site specified by the purchaser, either if the charge is separately
stated and does not exceed a reasonable charge or if the entire
consideration consists of payment for transportation.
   (9) The amount of any motor vehicle, mobilehome, or commercial
coach fee or tax imposed by and paid the State of California that has
been added to or is measured by a stated percentage of the sales or
purchase price of a motor vehicle, mobilehome, or commercial coach.
   (10) (A) The amount charged for intangible personal property
transferred with tangible personal property in any technology
transfer agreement, if the technology transfer agreement separately
states a reasonable price for the tangible personal property.
   (B) If the technology transfer agreement does not separately state
a price for the tangible personal property, and the tangible
personal property or like tangible personal property has been
previously sold or leased, or offered for sale or lease, to third
parties at a separate price, the price at which the tangible personal
property was sold, leased, or offered to third parties shall be used
to establish the retail fair market value of the tangible personal
property subject to tax. The remaining amount charged under the
technology transfer agreement is for the intangible personal property
transferred.
   (C) If the technology transfer agreement does not separately state
a price for the tangible personal property, and the tangible
personal property or like tangible personal property has not been
previously sold or leased, or offered for sale or lease, to third
parties at a separate price, the retail fair market value shall be
equal to 200 percent of the cost of materials and labor used to
produce the tangible personal property subject to tax. The remaining
amount charged under the technology transfer agreement is for the
intangible personal property transferred.
   (D) For purposes of this paragraph, "technology transfer agreement"
means any agreement under which a person who holds a patent or
copyright interest assigns or licenses to another person the right to
make and sell a product or to use a process that is subject to the
patent or copyright interest.
   (11) The amount of any tax imposed upon diesel fuel pursuant to
Part 31 (commencing with Section 60001).
   (12) (A) The amount of tax imposed by any Indian tribe within the
State of California with respect to a retail sale of tangible
personal property measured by a stated percentage of the sales or
purchase price, whether the tax is imposed upon the retailer or the
consumer.
   (B) The exclusion authorized by subparagraph (A) shall only apply
to those retailers who are in substantial compliance with this part.
   SEC. 2.   Section 6012 of the   Revenue and
Taxation Code   is amended to read: 
   6012.  (a) "Gross receipts" mean the total amount of the sale or
lease or rental price, as the case may be, of the retail sales of
retailers, valued in money, whether received in money or otherwise,
without any deduction on account of any of the following:
   (1) The cost of the property sold. However, in accordance with any
rules and regulations as the board may prescribe, a deduction may be
taken if the retailer has purchased property for some other purpose
than resale, has reimbursed his or her vendor for tax which the
vendor is required to pay to the state or has paid the use tax with
respect to the property, and has resold the property prior to making
any use of the property other than retention, demonstration, or
display while holding it for sale in the regular course of business.
If that deduction is taken by the retailer, no refund or credit will
be allowed to his or her vendor with respect to the sale of the
property.
   (2) The cost of the materials used, labor or service cost,
interest paid, losses, or any other expense.
   (3) The cost of transportation of the property, except as excluded
by other provisions of this section.
   (4) The amount of any tax imposed by the United States upon
producers and importers of gasoline and the amount of any tax imposed
pursuant to Part 2 (commencing with Section 7301) of this division.
   (b) The total amount of the sale or lease or rental price includes
all of the following:
   (1) Any services that are a part of the sale.
   (2) All receipts, cash, credits and property of any kind.
   (3) Any amount for which credit is allowed by the seller to the
purchaser.
   (c) "Gross receipts" do not include any of the following:
   (1) Cash discounts allowed and taken on sales.
   (2) Sale price of property returned by customers when that entire
amount is refunded either in cash or credit, but this exclusion shall
not apply in any instance when the customer, in order to obtain the
refund, is required to purchase other property at a price greater
than the amount charged for the property that is returned. For the
purpose of this section, refund or credit of the entire amount shall
be deemed to be given when the purchase price less rehandling and
restocking costs are refunded or credited to the customer. The amount
withheld for rehandling and restocking costs may be a percentage of
the sales price determined by the average cost of rehandling and
restocking returned merchandise during the previous accounting cycle.

   (3) The price received for labor or services used in installing or
applying the property sold.
   (4) (A) The amount of any tax (not including, however, any
manufacturers' or importers' excise tax, except as provided in
subparagraph (B)) imposed by the United States upon or with respect
to retail sales whether imposed upon the retailer or the consumer.
   (B) The amount of manufacturers' or importers' excise tax imposed
pursuant to Section 4081 or 4091 of the Internal Revenue Code for
which the purchaser certifies that he or she is entitled to either a
direct refund or credit against his or her income tax for the federal
excise tax paid or for which the purchaser issues a certificate
pursuant to Section 6245.5.
   (5) The amount of any tax imposed by any city, county, city and
county, or rapid transit district within the State of California upon
or with respect to retail sales of tangible personal property
measured by a stated percentage of sales price or gross receipts
whether imposed upon the retailer or the consumer.
   (6) The amount of any tax imposed by any city, county, city and
county, or rapid transit district within the State of California with
respect to the storage, use or other consumption in that city,
county, city and county, or rapid transit district of tangible
personal property measured by a stated percentage of sales price or
purchase price, whether the tax is imposed upon the retailer or the
consumer.
   (7) Separately stated charges for transportation from the retailer'
s place of business or other point from which shipment is made
directly to the purchaser, but the exclusion shall not exceed a
reasonable charge for transportation by facilities of the retailer or
the cost to the retailer of transportation by other than facilities
of the retailer. However, if the transportation is by facilities of
the retailer, or the property is sold for a delivered price, this
exclusion shall be applicable solely with respect to transportation
which occurs after the sale of the property is made to the purchaser.
 If the charges for transportation are not separately stated, or
if they are combined with handling or other charges, then this
exclusion shall not apply and those charges for transportation are
included in gross receipts. 
   (8) Charges for transporting landfill from an excavation site to a
site specified by the purchaser, either if the charge is separately
stated and does not exceed a reasonable charge or if the entire
consideration consists of payment for transportation.
   (9) The amount of any motor vehicle, mobilehome, or commercial
coach fee or tax imposed by and paid to the State of California that
has been added to or is measured by a stated percentage of the sales
or purchase price of a motor vehicle, mobilehome, or commercial
coach.
   (10) (A) The amount charged for intangible personal property
transferred with tangible personal property in any technology
transfer agreement, if the technology transfer agreement separately
states a reasonable price for the tangible personal property.
   (B) If the technology transfer agreement does not separately state
a price for the tangible personal property, and the tangible
personal property or like tangible personal property has been
previously sold or leased, or offered for sale or lease, to third
parties at a separate price, the price at which the tangible personal
property was sold, leased, or offered to third parties shall be used
to establish the retail fair market value of the tangible personal
property subject to tax. The remaining amount charged under the
technology transfer agreement is for the intangible personal property
transferred.
   (C) If the technology transfer agreement does not separately state
a price for the tangible personal property, and the tangible
personal property or like tangible personal property has not been
previously sold or leased, or offered for sale or lease, to third
parties at a separate price, the retail fair market value shall be
equal to 200 percent of the cost of materials and labor used to
produce the tangible personal property subject to tax. The remaining
amount charged under the technology transfer agreement is for the
intangible personal property transferred.
   (D) For purposes of this paragraph, "technology transfer agreement"
means any agreement under which a person who holds a patent or
copyright interest assigns or licenses to another person the right to
make and sell a product or to use a process that is subject to the
patent or copyright interest.
   (11) The amount of any tax imposed upon diesel fuel pursuant to
Part 31 (commencing with Section 60001).
   (12) (A) The amount of tax imposed by any Indian tribe within the
State of California with respect to a retail sale of tangible
personal property measured by a stated percentage of the sales or
purchase price, whether the tax is imposed upon the retailer or the
consumer.
   (B) The exclusion authorized by subparagraph (A) shall only apply
to those retailers who are in substantial compliance with this part.
   For purposes of the sales tax, if the retailers establish to the
satisfaction of the board that the sales tax has been added to the
total amount of the sale price and has not been absorbed by them, the
total amount of the sale price shall be deemed to be the amount
received exclusive of the tax imposed. Section 1656.1 of the Civil
Code shall apply in determining whether or not the retailers have
absorbed the sales tax.
   SEC. 3.   This act provides for a tax levy within the
meaning of Article IV of the Constitution and shall go into
immediate effect. However, the provisions of this act shall become
operative on the first day of the first calendar quarter commencing
more than 90 days after the effective date of this act. 

  SECTION 1.    Section 401.3 of the Revenue and
Taxation Code is amended to read:
   401.3.  The assessor shall assess all property subject to general
property taxation on the lien date as provided by Articles XIII and
XIII A of the Constitution and any legislative authorization
thereunder.