CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill No. 405

Introduced by Assembly Member Blanca Rubio

February 07, 2019

An act to amend Section 6353 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


AB 405, as introduced, Blanca Rubio. Sales and use taxes: exemption: water treatment.
The Sales and Use Tax Law imposes a tax on retailers measured by the gross receipts from the sale in this state of, or the storage, use, or other consumption in this state of, tangible personal property. The law provides various exemptions from that tax, including an exemption for the sale of, or the storage, use, or consumption of, gas, electricity, and water when delivered to consumers, as specified.
This bill would exempt from that tax the gross receipts from the sale in this state of, and the storage, use, or other consumption in this state of, chemicals used to treat water, recycled water, or wastewater regardless of whether those chemicals or other agents become a component part thereof and regardless of whether the treatment takes place before or after the delivery to consumers.
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 existing laws authorize 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 the Sales and Use Tax Law are automatically incorporated into the local tax laws.
Existing law requires the state to 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 any local agencies for sales and use tax revenues lost by them pursuant to this bill.
This bill would take effect immediately as a tax levy.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 6353 of the Revenue and Taxation Code is amended to read:

6353.
 There are exempted from the taxes imposed by this part the gross receipts derived from the sales, furnishing, or service of and the storage, use, or other consumption in this state of, all of the following:
(a) Gas, electricity, and water, including steam and geothermal steam, brines, and heat, when delivered to consumers through mains, lines, or pipes. This exemption includes chemicals and other agents used to treat water, recycled water, or wastewater, regardless of whether the chemicals and other agents become a component part thereof, and regardless of whether the treatment takes place before or after the delivery to consumers.
(b) (1) Liquefied petroleum gas, delivered to a qualified residence by the seller, that is sold for household use in the qualified residence, or liquefied petroleum gas that is purchased for use by a qualified person to be used in producing and harvesting agricultural products; provided, in either case, the liquefied petroleum gas is delivered into a tank with a storage capacity for liquefied petroleum gas that is equal to or greater than 30 gallons. This subdivision may not be construed to provide any exemption from any tax levied by a city, county, or city and county pursuant to Section 7284.3, or any successor to that section.
(2) For purposes of this subdivision:
(A) “Qualified residence” means a primary residence, not serviced by gas mains and pipes.
(B) “Qualified person” means any person engaged in a line of business described in Codes 0111 to 0291, inclusive, of the Standard Industrial Classification Manual published by the United States Office of Management and Budget, 1987 Edition, and any other person that assists that person in the lines of business described in this paragraph in producing and harvesting agricultural products.
(c) Water, when sold to an individual in bulk quantities of 50 gallons or more, for general household use in his or her the individual’s residence if the residence is located in an area not serviced by mains, lines, or pipes.
(d) Exhaust steam, waste steam, heat, or resultant energy, produced in connection with cogeneration technology, as defined in Section 25134 of the Public Resources Code.
(e) The exemptions provided by subdivision (b) shall be effective starting September 1, 2001.
(f) The amendments made by the act adding this subdivision shall be operative on the effective date of the act adding this subdivision.

SEC. 2.

 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.

SEC. 3.

 This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.