Bill Text: CA AB2060 | 2009-2010 | Regular Session | Amended

California Assembly Bill 2060 (Prior Session Legislation)

CA State Legislature page for AB2060

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

Bill Title: Public contracts: fixed price contracts: sales and use

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Vetoed) 2010-09-30 - Vetoed by Governor. [AB2060 Detail]

Download: California-2009-AB2060-Amended.html

BILL NUMBER: AB 2060	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JULY 15, 2010
	AMENDED IN ASSEMBLY  MAY 18, 2010

INTRODUCED BY   Assembly Member Charles Calderon

                        FEBRUARY 18, 2010

   An act to add Section 6376.3 to the Revenue and Taxation Code,
relating to taxation, to take effect immediately, tax levy.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2060, as amended, Charles Calderon. Sales and use taxes:
exemption: fixed price contract.
   Existing law imposes a state sales and use tax on retailers and on
the storage, use, or other consumption of tangible personal property
in this state at the combined rate of 81/4% of the gross receipts
from the retail sale of tangible personal property in this state and
of the sales price of tangible personal property purchased from any
retailer for storage, use, or other consumption in this state that is
stored, used, or otherwise consumed in this state.
   This bill would, for any increase in the state sales and use tax
rate that occurs on or after the effective date of this bill, exclude
from that increased rate of tax, the sale of, and the storage, use
or other consumption in this state of, tangible personal property
that is subject to a fixed price contract under specified
circumstances entered into prior to the operative date of the state
sales and use tax rate increase, as provided.
   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 6376.3 is added to the Revenue and Taxation
Code, to read:
   6376.3.  (a) On and after the operative date of an increase in the
sales and use tax rate, to the date on which that increase in tax
rate ceases to be operative, there is exempted from the taxes imposed
by this part an amount equal to an amount that is attributable to
the increased rate of tax imposed with respect to the following:
   (1) (A) The gross receipts from the sale of, and the storage, use,
or other consumption in this state of, tangible personal property if
the seller is obligated to furnish a government entity with the
property or the government entity is obligated to purchase the
property for a fixed price pursuant to a contract entered into prior
to the operative date of the increase in the sales and use tax rate.
   (B) For purposes of this paragraph, tangible personal property
shall not be deemed obligated pursuant to a contract for any period
of time for which any party to the contract has the right to
terminate the contract upon notice, whether or not the right is
exercised.

   (2) (A) The gross receipts from the sale of, and the storage, use,
or other consumption in this state of, materials and fixtures
obligated pursuant to a construction contract entered into for a
fixed price prior to the operative date of the increase in the sales
and use tax rate.
   (B) This paragraph shall apply only to construction contracts in
which a government entity is a party to the construction contract
 or where a qualified contractor is obligated to sell or
furnish the materials and fixtures.  
   (C) For purposes of this paragraph:  
   (i) "Fixed price" means the prices or price specified in the
construction contract is a lump-sum price or a stated unit price or a
guaranteed maximum price, and the construction contract does not
authorize an increase in price due to an increase in the rate of
sales and use taxes.  
   (ii) "Guaranteed maximum price" means that the price specified in
the construction contract is for actual costs plus a fixed fee, but
subject to a maximum price. 
    (iii)     "Qualified
contractor" means a construction contractor with no more than one
million dollars ($1,000,000) in gross receipts from business
operations and no more than two hundred fifty thousand dollars
($250,000) in taxable income in the prior taxable year. 
 .  
   (iv) Tangible 
    (c)    For purposes of this paragraph,
tagible  personal property shall not be deemed obligated
pursuant to a contract for any period of time for which any party to
the contract has the right to terminate the contract upon notice,
whether or not the right is exercised.
   (3) (A) A lease of tangible personal property that is a continuing
sale of the property for any period of time for which the lessor is
obligated to lease the property for an amount fixed by the lease
prior to the operative date of the increase in the sales and use tax
rate.
   (B) This paragraph shall apply only to leases of tangible personal
property to a government entity.
   (C) For purposes of this paragraph, the sale or lease of tangible
personal property shall be deemed not to be obligated pursuant to a
contract or lease for any period of time for which any party to the
contract or lease has the unconditional right to terminate the
contract or lease upon notice, whether or not that right is
exercised.
   (4) (A) The possession of, or the exercise of, any right or power
over tangible personal property pursuant to a lease that is a
continuing purchase of the property for any period of time for which
the lessee is obligated to lease the property for an amount fixed by
a lease entered into prior to the operative date of the increase in
the sales and use tax rate. For purposes of this  subdivision
  paragraph  , the storage, use, or other
consumption of, or possession of, or exercise of any right or power
over, tangible personal property shall be deemed not to be obligated
pursuant to a contract or lease for any period of time for which any
party to the contract or lease has the unconditional right to
terminate the contract or lease upon notice, whether or not the right
is exercised.
   (B) This paragraph shall apply only to leases of tangible personal
property to a government entity. 
   (b) For purposes of this section, "government entity" means
 
    (b) For purposes of this section:  
    (1) "Fixed price" means the the prices or price specified in the
construction contract is a lump sum price or a stated unit p4rice or
a guaranteed maximum price, and the construction contract does not
authorize an increase in price due to an incrases in the rate of
sales and use taxes. 
    (2)     "Government entity" means  the
United States, the State of California, or any city, county, or city
and county, community college district, school district, county
superintendent of schools, or special district in this state.
   (c) This section shall apply only to increases in the sales and
use tax rate that occur on or after the effective date of the act
adding this  section   subdivision  . 
   (d) On or before July 1, 2011, if the sales and use tax rate
imposed pursuant to Sections 6051.7 and 6201.7, or any portion
thereof, is extended for a period or periods on and after July 1,
2011, the sales and use tax rate extension shall be regarded as "an
increase in the sales and use tax rate" for purposes of subdivision
(a). 
  SEC. 2.  This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.