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

California Assembly Bill 2365 (Prior Session Legislation)

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-Enrolled.html

BILL NUMBER: AB 2365	ENROLLED
	BILL TEXT

	PASSED THE SENATE  AUGUST 11, 2016
	PASSED THE ASSEMBLY  MAY 31, 2016
	AMENDED IN ASSEMBLY  MAY 16, 2016
	AMENDED IN ASSEMBLY  MARCH 18, 2016

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

                        FEBRUARY 18, 2016

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



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2365, Gipson. 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 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
become vested with the title to pledged property.
   This bill, until January 1, 2022, 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.



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.
   (c) This section shall become inoperative and shall be repealed on
January 1, 2022.
  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.