BILL NUMBER: SB 1341	CHAPTERED  09/20/06

	CHAPTER  373
	FILED WITH SECRETARY OF STATE  SEPTEMBER 20, 2006
	APPROVED BY GOVERNOR  SEPTEMBER 20, 2006
	PASSED THE SENATE  AUGUST 29, 2006
	PASSED THE ASSEMBLY  AUGUST 24, 2006
	AMENDED IN ASSEMBLY  JUNE 21, 2006
	AMENDED IN SENATE  MARCH 23, 2006

INTRODUCED BY   Senator Cedillo

                        FEBRUARY 17, 2006

   An act to amend Section 6363.3 of the Revenue and Taxation Code,
relating to taxation, to take effect immediately, tax levy.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1341, Cedillo  Sales and use tax exemption: charitable thrift
stores.
   The Sales and Use Tax Law imposes a tax on 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 this tax, including an exemption for retail
items sold by thrift stores operated by nonprofit organizations, if
the purpose of that thrift store is to obtain funding for medical,
hospice, or social services provided to individuals with HIV disease
or AIDS by the nonprofit organization. This exemption will be
repealed January 1, 2007.
   This bill would change the repeal date of the exemption to January
1, 2012, and would require a thrift store claiming the tax exemption
for retail items to have at least 75% of its net income derived from
operations of the thrift store.
   Counties and cities are authorized to impose local sales and use
taxes in conformity with state sales and use taxes.  Exemptions from
state sales and use taxes enacted by the Legislature are incorporated
into the local taxes.
   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 bill would take effect immediately as a tax levy.


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


  SECTION 1.  Section 6363.3 of the Revenue and Taxation Code is
amended to read:
   6363.3.  (a) There are exempted from the taxes imposed by this
part, the gross receipts from the sale in this state of, and the
storage, use, or other consumption in this state of, used pieces of
clothing, household items, or other retail items sold by thrift
stores operated by a nonprofit organization if the purpose of that
thrift store is to obtain revenue for the funding of medical,
hospice, or social services to chronically ill individuals, and at
least 75 percent of the net income derived from operations of the
thrift store are actually expended for the purpose of providing
medical, hospice, or social services to the chronically ill.
   (b) For purposes of this section, "nonprofit organization" means
an organization that provides medical, hospice, or social services to
individuals with a chronic, life-threatening illness, as defined in
subdivision (c) of Section 1568.01 of the Health and Safety Code, and
is exempt from taxation under Section 23701d.
   (c) This section shall cease to be operative on January 1, 2012,
and as of that date is repealed.
  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.