Bill Text: CA AB2618 | 2011-2012 | Regular Session | Amended

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

---

Bill Title: Sales and use taxes: auction: vehicles.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2012-09-29 - Chaptered by Secretary of State - Chapter 756, Statutes of 2012. [AB2618 Detail]

Download: California-2011-AB2618-Amended.html

---

BILL NUMBER: AB 2618	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 18, 2012
	AMENDED IN ASSEMBLY  MARCH 29, 2012

INTRODUCED BY   Assembly Member Ma

                        FEBRUARY 24, 2012

    An act to amend Section 1812.607 of the Civil Code,
relating to auctions.   An act to add Section 6092.5 to
the Revenue and Taxation Code, relating to taxation, to take effect
immedi   ately, tax levy. 



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2618, as amended, Ma.  Auctions: transaction records.
  Sales and use taxes: auction: vehicles.  
   The Sales and Use Tax Law presumes that all proceeds from retail
sales are subject to tax until the contrary is established. The
burden of proving a sale of tangible personal property is not a
retail sale subject to tax is on the seller unless the seller takes a
resale certificate in good faith from a person engaged in the
business of selling tangible personal property who holds a permit
under that law. Under that law, a person engaged in the business of
making retail sales at auction of tangible personal property owned by
others is a retailer. That law generally provides that retail sales
of vehicles subject to registration under the Vehicle Code are
subject to sales tax when sold by a person licensed or certificated
under the Vehicle Code and subject to use tax, collected by the
Department of Motor Vehicles, when sold by a person not so licensed
or certificated. A vehicle not registered under the Vehicle Code,
such as a salvage vehicle, is not subject to the special rules for
registered vehicles.  
   This bill would provide that a licensed dismantler that sells
specified vehicles, motorhomes, or commercial coaches subject to
registration or qualification under the Health and Safety Code or the
Vehicle Code, and salvage certificate vehicles, or a person making
those sales at auction, is presumed to be making a sale at retail,
subject to tax and not a sale for resale. This bill would provide
that the seller may rebut this presumption by taking a resale
certificate that includes specified information from a licensed
dealer, dismantler, automotive repair dealer, or scrap metal
processor. This bill would allow a qualified person that does not
timely obtain a resale certificate to use alternative methods,
prescribed by the State Board of Equalization, to verify the
transaction is a valid sale for resale.  
   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. 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.  
   This bill would include a change in state statute that would
result in a taxpayer paying a higher tax 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. 

   Existing law requires every auction company and auctioneer to keep
and maintain complete and correct records and accounts pertaining to
the auctioneer's or auction company's activity for a period of no
less than 2 years.  
   This bill would require every auction company and auctioneer to
provide transaction records to the State Board of Equalization when
the transaction involves a salvage vehicle and a resale certificate,
unless exempted. 
   Vote:  majority   2/3  . Appropriation:
no. Fiscal committee: yes. State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 6092.5 is added to the 
 Revenue and Taxation Code   , to read:  
   6092.5.  (a) Every qualified person making any sale of a
mobilehome or commercial coach required to be registered annually
under the Health and Safety Code, or of a vehicle required to be
registered under the Vehicle Code or subject to identification under
Division 16.5 (commencing with Section 38000) of the Vehicle Code, or
a vehicle that qualifies under the permanent trailer identification
plate program pursuant to subdivision (a) of Section 5014.1 of the
Vehicle Code, or of any salvage certificate vehicle as defined in
Section 11515 of the Vehicle Code, is presumed to be making a sale at
retail and not a sale for resale. The presumption may be rebutted by
taking a resale certificate from any of the following:
   (1) A person that certifies it is licensed, registered, regulated,
or certificated under the Health and Safety Code or the Vehicle Code
as a dealer or dismantler.
   (2) A person that certifies it is licensed, registered, regulated,
or certificated under the Business and Professions Code as an
automotive repair dealer, or is qualified as a scrap metal processor
as described in the Vehicle Code.
   (3) A person that certifies it is licensed, registered, regulated,
certificated, or otherwise authorized by another state, country, or
jurisdiction to do business as a dealer, dismantler, automotive
repairer, or scrap metal processor.
   (b) A qualified person shall not accept a resale certificate from
any person except as provided in subdivision (a).
   (c) (1) In addition to the requirements of Sections 6093 and 6243,
the certificate shall include the license or registration number of
the dealer, dismantler, or automotive repair dealer, as applicable.
If the purchaser is not required to hold a seller's permit because
the purchaser makes no sales in this state, the purchaser must
include on the certificate a sufficient explanation as to the reason
the purchaser is not required to hold a California seller's permit in
lieu of the seller's permit number. The certificate issued by a
purchaser pursuant to this section shall be substantially in such
form as the board may prescribe.
   (2) A qualified person that does not timely obtain a resale
certificate as provided in this section may use alternative methods
as prescribed by the board to rebut the presumption provided in
subdivision (a).
   (d) For the purposes of this section, a "qualified person" means a
person making a sale at auction or a dismantler licensed under the
Vehicle Code. 
   SEC. 2.    This act provides for a tax levy within
the meaning of Article IV of the Constitution and shall go into
immediate effect.  
  SECTION 1.    Section 1812.607 of the Civil Code
is amended to read:
   1812.607.  Every auction company and auctioneer shall do all of
the following:
   (a) Disclose his or her name, trade or business name, telephone
number, and bond number in all advertising of auctions. A first
violation of this subdivision is an infraction subject to a fine of
fifty dollars ($50); a second violation is subject to a fine of
seventy-five dollars ($75); and a third or subsequent violation is
subject to a fine of one hundred dollars ($100). This section shall
not apply to business cards, business stationery, or to any
advertisement that does not specify an auction date.
   (b) Post a sign, the dimensions of which shall be at least 18
inches by 24 inches, at the main entrance to each auction, stating
that the auction is being conducted in compliance with Section 2328
of the Commercial Code, Section 535 of the Penal Code, and the
provisions of the California Civil Code. A first violation of this
subdivision is an infraction subject to a fine of fifty dollars
($50); a second violation is subject to a fine of seventy-five
dollars ($75); and a third or subsequent violation is subject to a
fine of one hundred dollars ($100).
   (c) Post or distribute to the audience the terms, conditions,
restrictions, and procedures whereby goods will be sold at the
auction, and announce any changes to those terms, conditions,
restrictions, and procedures prior to the beginning of the auction
sale. A first violation of this subdivision is an infraction subject
to a fine of fifty dollars ($50); a second violation is subject to a
fine of one hundred dollars ($100); and a third or subsequent
violation is subject to a fine of two hundred fifty dollars ($250).
   (d) Notify the Secretary of State of any change in address of
record within 30 days of the change. A violation of this subdivision
is an infraction subject to a fine of fifty dollars ($50).
   (e) Notify the Secretary of State of any change in the officers of
a corporate license within 30 days of the change. A violation of
this subdivision is an infraction subject to a fine of fifty dollars
($50).
   (f) Notify the Secretary of State of any change in the business or
trade name of the auctioneer or auction company within 30 days of
the change. A violation of this subdivision is an infraction subject
to a fine of fifty dollars ($50).
   (g) Keep and maintain, at the auctioneer's or auction company's
address of record, complete and correct records and accounts
pertaining to the auctioneer's or auction company's activity for a
period of not less than two years. The records shall include the name
and address of the owner or consignor and of any buyer of goods at
any auction sale engaged in or conducted by the auctioneer or auction
company, a description of the goods, the terms and conditions of the
acceptance and sale of the goods, all written contracts with owners
and consignors, and accounts of all moneys received and paid out,
whether on the auctioneer's or auction company's own behalf or as
agent, as a result of those activities. A first violation of this
subdivision is a misdemeanor subject to a fine of five hundred
dollars ($500); and a second or subsequent violation is subject to a
fine of one thousand dollars ($1,000).
   (h) Within 30 working days after the sale transaction, provide, or
cause to be provided, an account to the owner or consignor of all
goods that are the subject of an auction engaged in or conducted by
the auctioneer or auction company. A first violation of this
subdivision is a misdemeanor subject to a fine of five hundred
dollars ($500); and a second or subsequent violation is subject to a
fine of one thousand dollars ($1,000).
   (i) Within 30 working days after a sale transaction of goods, pay
or cause to be paid all moneys and proceeds due to the owner or the
consignor of all goods that were the subject of an auction engaged in
or conducted by the auctioneer or auction company, unless delay is
compelled by legal proceedings or the inability of the auctioneer or
auction company, through no fault of his or her own, to transfer
title to the goods or to comply with any provision of this chapter,
the Commercial Code, or the Code of Civil Procedure, or with any
other applicable provision of law. A first violation of this
subdivision is a misdemeanor subject to a fine of one thousand
dollars ($1,000); a second violation is subject to a fine of one
thousand five hundred dollars ($1,500); and a third or subsequent
violation is subject to a fine of two thousand dollars ($2,000).
   (j) Maintain the funds of all owners, consignors, buyers, and
other clients and customers separate from his or her personal funds
and accounts. A violation of this subdivision is an infraction
subject to a fine of two hundred fifty dollars ($250).
   (k) Immediately prior to offering any item for sale, disclose to
the audience the existence and amount of any liens or other
encumbrances on the item, unless the item is sold as free and clear.
For the purposes of this subdivision, an item is "free and clear" if
all liens and encumbrances on the item are to be paid prior to the
transfer of title. A violation of this subdivision is an infraction
subject to a fine of two hundred fifty dollars ($250) in addition to
the requirement that the buyer be refunded, upon demand, the amount
paid for any item that is the subject of the violation.
   (  l  ) Within two working days after an auction
sale, return the blank check or deposit of each buyer who purchased
no goods at the sale. A first violation of this subdivision is an
infraction subject to a fine of one hundred dollars ($100); and a
second or subsequent violation is subject to a fine of two hundred
fifty dollars ($250).
   (m) Within 30 working days of any auction sale, refund that
portion of the deposit of each buyer that exceeds the cost of the
goods purchased, unless delay is compelled by legal proceedings or
the inability of the auctioneer or auction company, through no fault
of his or her own, to transfer title to the goods or to comply with
any provision of this chapter, the Commercial Code, or the Code of
Civil Procedure, or with other applicable provisions of law, or
unless the buyer violated the terms of a written agreement that he or
she take possession of purchased goods within a specified period of
time. A first violation of this subdivision is an infraction subject
to a fine of one hundred dollars ($100); and a second or subsequent
violation is subject to a fine of two hundred fifty dollars ($250).
   (n) When the auction sale involves a salvage certificate vehicle
as defined in Section 11515 of the Vehicle Code and a resale
certificate pursuant to Article 3 (commencing with Section 6091) of
Chapter 2 of the Revenue and Taxation Code, the auctioneer or auction
company shall provide the transaction records listed under
subdivision (g) to the State Board of Equalization, unless the resale
certificate is provided by any of the following:
   (1) A person who certifies he or she is licensed, registered,
regulated, or certified under the Health and Safety Code or the
Vehicle Code as a dealer or dismantler.
   (2) A person who certifies he or she is licensed, registered,
regulated, or certified under the Business and Professions Code as an
automotive repair dealer, or is qualified as a scrap metal processor
as described in the Vehicle Code.
   (3) A person who certifies he or she is licensed, registered,
regulated, or certified, or otherwise authorized by another state,
country, or jurisdiction to do business as a dealer, dismantler,
automotive repairer, or scrap metal processor.