BILL NUMBER: AB 1486	CHAPTERED
	BILL TEXT

	CHAPTER  538
	FILED WITH SECRETARY OF STATE  OCTOBER 11, 2009
	APPROVED BY GOVERNOR  OCTOBER 11, 2009
	PASSED THE SENATE  AUGUST 27, 2009
	PASSED THE ASSEMBLY  AUGUST 31, 2009
	AMENDED IN SENATE  JULY 14, 2009
	AMENDED IN ASSEMBLY  MAY 21, 2009
	AMENDED IN ASSEMBLY  APRIL 14, 2009

INTRODUCED BY   Assembly Member Furutani

                        FEBRUARY 27, 2009

   An act to add and repeal Section 6018.9 of the Revenue and
Taxation Code, relating to taxation, to take effect immediately, tax
levy.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1486, Furutani. Sales and use taxes: consumer: nonprofit
membership organizations.
   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. That
law, with certain exceptions, defines a retailer as a seller who
makes any retail sale of tangible personal property and as a person
who makes more than 2 retail sales of tangible personal property
during any 12-month period, and defines a retail sale as a sale of
tangible personal property for any purpose other than resale in the
regular course of business.
   This bill would, until January 1, 2015, provide that a membership
organization, as described in Section 501(c) of the Internal Revenue
Code, is the consumer, and not a retailer, of tangible personal
property meeting certain requirements that it provides to its
members, so that the retail sale subject to tax is the sale of
tangible personal property to the membership organization.
   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 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, but its
operative date would depend on its effective date.


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

  SECTION 1.  Section 6018.9 is added to the Revenue and Taxation
Code, to read:
   6018.9.  (a) An organization described in Section 501(c) of the
Internal Revenue Code is a consumer of, and shall not be considered a
retailer within the provisions of this part for purposes of any
transfer of, tangible personal property to its members, as defined in
Section 5056 of the Corporations Code, if the following requirements
are met:
   (1) The tangible personal property bears a logo or other
identifying mark of the organization and is a promotional item or
other item commonly associated with use by a member to demonstrate
the member's association with, or membership in, the organization.
   (2) The cost to the member of the organization for the acquisition
of the tangible personal property is not more than the cost to the
nonprofit organization to obtain and transfer to the member the
tangible personal property, including any applicable sales or use tax
paid by the nonprofit organization.
   (3) Reasonable steps are taken by the organization to ensure that
no member is allowed to acquire more than 30 identical items of
tangible personal property or to resell the items to another person.
   (4) The tangible personal property is not distributed for purposes
of organized political campaigning or issue advocacy.
   (b) This section shall remain in effect only until January 1,
2015, 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.
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.