Bill Text: CA AB394 | 2009-2010 | Regular Session | Amended
Bill Title: Sales and use taxes: exemption: automobile manufacturing.
Sponsorship: Partisan Bill (Democrat 3)
Status: (Engrossed - Dead) 2009-09-08 - Senate Rule 29.3 suspended. (Ayes 23. Noes 14. Page 2280.) From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on REV. & TAX. [AB394 Detail]
Download: California-2009-AB394-Amended.html
BILL NUMBER: AB 394 AMENDED
BILL TEXT
AMENDED IN SENATE SEPTEMBER 8, 2009
AMENDED IN SENATE AUGUST 24, 2009
AMENDED IN ASSEMBLY APRIL 13, 2009
INTRODUCED BY Assembly Member Torrico
(Coauthors: Senators Corbett and Wright)
FEBRUARY 23, 2009
An act to add Section 6356.7 to the Revenue and Taxation Code,
relating to taxation, to take effect immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
AB 394, as amended, Torrico. Sales and use taxes: exemption:
automobile manufacturing.
(1) The Sales and Use Tax Law imposes 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.
This bill would exempt from those taxes the gross receipts from
the sale of, and the storage, use, or other consumption in this state
of, tangible personal property, as specified, purchased for use by
an automobile manufacturer located in Fremont, California or
purchased for use by a contractor who will use the property in
performing a construction contract for the automobile manufacturer,
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. Exemptions from
state sales and use taxes are incorporated in 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 local agencies for sales and use tax
revenues lost by them pursuant to this bill this
exemption does not apply to local sales and use taxes,
transactions and use taxes, and specified state sales and use taxes
.
(2) This bill would state the findings and declarations of the
Legislature concerning the need for special legislation.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes no .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 6356.7 is added to the Revenue and Taxation
Code, to read:
6356.7. (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, both of the following:
(1) Tangible personal property purchased for use by an automobile
manufacturer located in Fremont, California, to be used primarily in
any stage of the manufacturing, processing, refining, fabricating, or
assembling of automobiles, beginning at the point any raw materials
are received by the automobile manufacturer located in Fremont,
California, and introduced into the process and ending at the point
at which the manufacturing, processing, refining, fabricating, or
assembling has altered property to its completed form.
(2) Tangible personal property purchased for use by a contractor
purchasing that property for use in the performance of a construction
contract to construct a special purpose building or foundation,
including a research or storage facility used during the
manufacturing process, for an automobile manufacturer located in
Fremont, California who will use the special purpose building or
foundation as an integral part of the manufacturing, processing,
refining, or fabricating process. A building used solely for
warehousing purposes after completion of the manufacturing process is
not a special purpose building.
(b) For purposes of this section:
(1) "Automobile manufacturer" means a person who is primarily
engaged in that line of business described in Code 3361111 of the
North American Industrial Classification System (NAICS) published by
the United States Office of Management and Budget (OMB), 2002
edition.
(2) "Tangible personal property" includes, but is not limited to,
all of the following:
(A) Machinery and equipment, including component parts and
contrivances such as belts, shafts, moving parts, and operating
structures.
(B) All equipment or devices used or required to operate, control,
regulate, or maintain the machinery, including, without limitation,
computers, data processing equipment, and computer software, together
with all repair and replacement parts with a useful life of one or
more years therefor, whether purchased separately or in conjunction
with a complete machine and regardless of whether the machine or
component parts are assembled by the taxpayer or another party.
(c) No exemption shall be allowed under this section unless the
purchaser furnishes the retailer with an exemption certificate,
completed in accordance with any instructions or regulations as the
board may prescribe.
(d) Notwithstanding subdivision (a), the exemption provided by
this section shall not apply to any sale or use of property that,
within one year from the date of purchase, is either removed from
California, converted from an exempt use under subdivision (a) to
some other use not qualifying for the exemption, or used in a manner
not qualifying for the exemption.
(e) If a purchaser certifies in writing to the seller that the
property purchased without payment of the tax will be used in a
manner entitling the seller to regard the gross receipts from the
sale as exempt from the sales tax, and within one year from the date
of purchase, the purchaser (1) removes that property outside
California, (2) converts that property for use in a manner not
qualifying for the exemption, or (3) uses that property in a manner
not qualifying for the exemption, the purchaser shall be liable for
payment of sales tax, with applicable interest, as if the purchaser
were a retailer making a retail sale of the property at the time the
property is so removed, converted, or used, and the cost of the
property to the purchaser shall be deemed the gross receipts from
that retail sale.
(f) (1) Notwithstanding any provision of the Bradley-Burns Uniform
Local Sales and Use Tax Law (Part 1.5 (commencing with Section
7200)) or the Transactions and Use Tax Law (Part 1.6 (commencing with
Section 7251)), the exemption provided by this section shall not
apply with respect to any tax levied by a county, city, or district
pursuant to, or in accordance with, either of those laws.
(2) The exemption provided by this section shall not apply with
respect to any tax levied pursuant to Section 6051.2, 6051.5, 6201.2,
or 6201.5, or pursuant to Section 35 of Article XIII of the
California Constitution.
SEC. 2. The Legislature finds and declares that a special law is
necessary and that a general law cannot be made applicable within the
meaning of Section 16 of Article IV of the California Constitution
because of the unique circumstances and economic importance of
automobile manufacturing in Fremont, California.
SEC. 3. 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.
