Bill Text: CA AB821 | 2015-2016 | Regular Session | Amended

California Assembly Bill 821 (Prior Session Legislation)

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

Bill Title: Sales and use taxes: administration: payments: dispensaries.

Sponsorship: Partisan Bill (Democrat 1)

Status: (Passed) 2016-09-29 - Chaptered by Secretary of State - Chapter 811, Statutes of 2016. [AB821 Detail]

Download: California-2015-AB821-Amended.html

BILL NUMBER: AB 821	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JANUARY 4, 2016

INTRODUCED BY   Assembly Member Gipson

                        FEBRUARY 26, 2015

    An act to add Section 6369.6 to the Revenue and Taxation
Code, relating to taxation, to take effect immediately, tax levy.
  An act to amend Section 6479.3 of the Revenue and
Taxation Code, relating to taxation. 


	LEGISLATIVE COUNSEL'S DIGEST


   AB 821, as amended, Gipson.  Sales and use taxes:
exemption: medical marijuana: terminally ill patient.  
Sales and use taxes: administration: payments.  
   The Sales and Use Tax Law, which is administered by the State
Board of Equalization, requires any person whose estimated tax
liability averages $10,000 or more per month to remit amounts due by
electronic funds transfer, as provided.  
   This bill would authorize the board to allow persons to remit
amounts due by other than an electronic funds transfer if the board
deems it necessary to facilitate collection of amounts due. 

   Existing sales and use tax laws impose taxes 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
and provides various exemptions from those taxes. Existing law
relieves the seller from liability for the sales tax if an exemption
certificate is taken in good faith, and imposes liability for sales
tax on the purchaser if the tangible personal property purchased is
used in a manner or for a purpose not qualifying for the exemption,
as provided.  
   This bill would exempt from those taxes the gross receipts from
the sale of, and the storage, use, or other consumption of, medical
marijuana for consumption by a terminally ill patient, and would
require the purchaser to provide an exemption certificate as
provided.  
   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 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.  
   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 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, but its
operative date would depend on its effective date. 
   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 6479.3 of the  
Revenue and Taxation Code   is amended to read: 
   6479.3.  (a)  Any   Except as provided in
subdivision (k), any  person whose estimated tax liability under
this part averages ten thousand dollars ($10,000) or more per month,
as determined by the board pursuant to methods of calculation
prescribed by the board, shall remit amounts due by an electronic
funds transfer under procedures prescribed by the board. Any person
who collects use tax on a voluntary basis is not required to remit
amounts due by electronic funds transfer.
   (b) Any person whose estimated tax liability under this part
averages less than ten thousand dollars ($10,000) per month or any
person who voluntarily collects use tax may elect to remit amounts
due by electronic funds transfer with the approval of the board.
   (c) Any person remitting amounts due pursuant to subdivision (a)
or (b) shall perform electronic funds transfer in compliance with the
due dates set forth in Article 1 (commencing with Section 6451) and
Article 1.1 (commencing with Section 6470). Payment is deemed
complete on the date the electronic funds transfer is initiated, if
settlement to the state's demand account occurs on or before the
banking day following the date the transfer is initiated. If
settlement to the state's demand account does not occur on or before
the banking day following the date the transfer is initiated, payment
is deemed to occur on the date settlement occurs.
   (d) Any person remitting taxes by electronic funds transfer shall,
on or before the due date of the remittance, file a return for the
preceding reporting period in the form and manner prescribed by the
board. Any person who fails to timely file the required return shall
pay a penalty of 10 percent of the amount of taxes, exclusive of
prepayments, with respect to the period for which the return is
required.
   (e) (1) Except as provided in paragraph (2), any person required
to remit taxes pursuant to this article who remits those taxes by
means other than appropriate electronic funds transfer shall pay a
penalty of 10 percent of the taxes incorrectly remitted.
   (2) A person required to remit prepayments pursuant to this
article who remits a prepayment by means other than an appropriate
electronic funds transfer shall pay a penalty of 6 percent of the
prepayment amount incorrectly remitted.
   (f) Except as provided in Sections 6476 and 6477, any person who
fails to pay any tax to the state or any amount of tax required to be
collected and paid to the state, except amounts of determinations
made by the board under Article 2 (commencing with Section 6481) or
Article 3 (commencing with Section 6511), within the time required
shall pay a penalty of 10 percent of the tax or amount of tax, in
addition to the tax or amount of tax, plus interest at the modified
adjusted rate per month, or fraction thereof, established pursuant to
Section 6591.5, from the date on which the tax or the amount of tax
required to be collected became due and payable to the state until
the date of payment.
   (g) In determining whether a person's estimated tax liability
averages ten thousand dollars ($10,000) or more per month, the board
may consider tax returns filed pursuant to this part and any other
information in the board's possession.
   (h) Except as provided in subdivision (i), the penalties imposed
by subdivisions (d), (e), and (f) shall be limited to a maximum of 10
percent of the taxes due, exclusive of prepayments, for any one
return. Any person remitting taxes by electronic funds transfer shall
be subject to the penalties under this section and not Section 6591.

   (i) The penalties imposed with respect to paragraph (2) of
subdivision (e) and Sections 6476 and 6477 shall be limited to a
maximum of 6 percent of the prepayment amount.
   (j) The board shall promulgate regulations pursuant to Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2
of the Government Code for purposes of implementing this section.
   (k)  This section shall be operative on January 1, 2006.
  If   the board deems it necessary to
facilitate collection of amounts due, the board may allow persons to
remit amounts due by other than an electronic funds transfer. 

  SECTION 1.    Section 6369.6 is added to the
Revenue and Taxation Code, to read:
   6369.6.  (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, medical marijuana for consumption
by a terminally ill patient.
   (b) (1) No exemption shall be allowed under this section unless
the purchaser furnishes the retailer with a medical marijuana
exemption certificate, completed in accordance with any instructions
or regulations as the board may prescribe, and the retailer retains
the exemption certificate in its records. The medical marijuana
exemption certificate shall contain the cost of the medical marijuana
that is exempt pursuant to subdivision (a), identification card
serial number, and any other information deemed necessary by the
board.
   (2) The board shall establish and maintain a program for the
issuance of a medical marijuana exemption certificate. A medical
marijuana exemption certificate shall be issued to a person or his or
her primary caregiver upon satisfactory proof of terminal illness,
and shall be valid for the same period as the identification card
issued to the terminally ill patient pursuant to Article 2.5
(commencing with Section 11362.7) of Chapter 6 of Division 10 of the
Health and Safety Code and may be renewed once, unless otherwise
authorized by the board under regulations adopted pursuant to this
section.
   (c) A person who seeks a medical marijuana exemption certificate
shall provide all of the following to the board, in a manner as
determined by the board:
   (1) The name of the terminally ill patient.
   (2) Written documentation by the patient's attending physician
that certifies the patient is terminally ill based on the
circumstances and information available to the physician at the time
of diagnosis.
   (3) The name, office address, office telephone number, and
California medical license number of the patient's attending
physician.
   (4) The name and the duties of the primary caregiver.
   (5) A government-issued photo identification card of the person
and of the designated primary caregiver, if any.
   (6) The identification card issued by the Department of Public
Health.
   (7) Any other information deemed necessary by the board.
   (d) For purposes of this section:
   (1) "Attending physician" has the same meaning as that term is
defined in Section 11362.7 of the Health and Safety Code.
   (2) "Marijuana" has the same meaning as that term is defined in
Section 11018 of the Health and Safety Code.
   (3) "Medical marijuana" means marijuana used for medical purposes
in accordance with Sections 11362.5 and 11362.7 of the Health and
Safety Code.
   (4) "Primary caregiver" has the same meaning as that term is
defined in Section 11362.7 of the Health and Safety Code.
   (5) "Terminally ill" has the same meaning as that term is defined
in subdivision (c) of Section 11159.2 of the Health and Safety Code.
   (6) "Written documentation" means certification by the attending
physician that the patient is terminally ill.
   (e) Any person that uses a medical marijuana exemption certificate
in a manner contrary to the requirements of this section shall be
liable for payment of sales tax as if the purchaser were a retailer
making a retail sale of the property at the time of that use and the
cost of the marijuana to the purchaser shall be deemed the gross
receipts from the retail sale.  
  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 Constitution and shall go into
immediate effect. However, the provisions of this act shall become
operative on the first day of the first calendar quarter commencing
more than 90 days after the effective date of this act.