BILL NUMBER: AB 155 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 2, 2011
AMENDED IN ASSEMBLY MARCH 3, 2011
INTRODUCED BY Assembly Member Charles Calderon
JANUARY 18, 2011
An act to amend Section 6203 of the Revenue and Taxation Code,
relating to taxation.
LEGISLATIVE COUNSEL'S DIGEST
AB 155, as amended, Charles Calderon. Use tax: retailer engaged in
business.
Existing law imposes a sales tax on retailers measured by the
gross receipts from the sale of tangible personal property sold at
retail in this state, and a use tax 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,
measured by sales price. That law requires every retailer engaged in
business in this state, as defined, and making sales of tangible
personal property for storage, use, or other consumption in this
state to collect the tax from the purchaser. The commerce clause of
the United States Constitution allows a state to compel a retailer to
collect use tax if the retailer has a substantial nexus with the
state.
This bill would define a retailer engaged in business in this
state as a retailer that is a member of a commonly controlled group,
as defined under the Corporation Tax Law, and a member of a combined
reporting group, as defined, that includes another member of the
retailer's commonly controlled group that, pursuant to an agreement
with or in cooperation with the retailer, performs services in this
state in connection with tangible personal property to be sold by the
retailer. This bill would also eliminate an exclusion.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 6203 of the Revenue and Taxation Code is
amended to read:
6203. (a) Except as provided by Sections 6292 and 6293, every
retailer engaged in business in this state and making sales of
tangible personal property for storage, use, or other consumption in
this state, not exempted under Chapter 3.5 (commencing with Section
6271) or Chapter 4 (commencing with Section 6351), shall, at the time
of making the sales or, if the storage, use, or other consumption of
the tangible personal property is not then taxable hereunder, at the
time the storage, use, or other consumption becomes taxable, collect
the tax from the purchaser and give to the purchaser a receipt
therefor in the manner and form prescribed by the board.
(b) As respects leases constituting sales of tangible personal
property, the tax shall be collected from the lessee at the time
amounts are paid by the lessee under the lease.
(c) "Retailer engaged in business in this state" as used in this
section and Section 6202 means and includes any of the following:
(1) Any retailer maintaining, occupying, or using, permanently or
temporarily, directly or indirectly, or through a subsidiary, or
agent, by whatever name called, an office, place of distribution,
sales or sample room or place, warehouse or storage place, or other
place of business.
(2) Any retailer having any representative, agent, salesperson,
canvasser, independent contractor, or solicitor operating in this
state under the authority of the retailer or its subsidiary for the
purpose of selling, delivering, installing, assembling, or the taking
of orders for any tangible personal property.
(3) Any retailer that is a member of a commonly controlled group,
as defined in Section 25105, and is a member of a combined reporting
group, as defined in paragraph (3) of subdivision (b) of Section
25106.5 of Title 18 of the California Code of Regulations, that
includes another member of the retailer's commonly controlled group
that, pursuant to an agreement with or in cooperation with the
retailer, performs services in this state in connection with tangible
personal property to be sold by the retailer, including, but not
limited to, design and development of tangible personal property sold
by the retailer, or the solicitation of sales of tangible personal
property on behalf of the retailer.
(4) As respects a lease, any retailer deriving rentals from a
lease of tangible personal property situated in this state.
(5) (A) Any retailer soliciting orders for tangible personal
property by mail if the solicitations are substantial and recurring
and if the retailer benefits from any banking, financing, debt
collection, telecommunication, or marketing activities occurring in
this state or benefits from the location in this state of authorized
installation, servicing, or repair facilities.
(B) This paragraph shall become operative upon the enactment of
any congressional act that authorizes states to compel the collection
of state sales and use taxes by out-of-state retailers.
(6) Notwithstanding Section 7262, a retailer specified in
paragraph (5), and not specified in paragraph (1), (2), (3) or (4),
is a "retailer engaged in business in this state" for the purposes of
this part and Part 1.5 (commencing with Section 7200) only.
(d) (1) For purposes of this section, "engaged in business in this
state" does not include the taking of orders from customers in this
state through a computer telecommunications network located in this
state which is not directly or indirectly owned by the retailer when
the orders result from the electronic display of products on that
same network. The exclusion provided by this subdivision shall apply
only to a computer telecommunications network that consists
substantially of online communications services other than the
displaying and taking of orders for products.
(2) This subdivision shall become inoperative upon the operative
date of provisions of a congressional act that authorize states to
compel the collection of state sales and use taxes by out-of-state
retailers.
(e) Except as provided in this subdivision, a retailer is not a
"retailer engaged in business in this state" under paragraph (2) of
subdivision (c) if that retailer's sole physical presence in this
state is to engage in convention and trade show activities as
described in Section 513(d)(3)(A) of the Internal Revenue Code, and
if the retailer, including any of his or her representatives, agents,
salespersons, canvassers, independent contractors, or solicitors,
does not engage in those convention and trade show activities for
more than 15 days, in whole or in part, in this state during any
12-month period and did not derive more than one hundred thousand
dollars ($100,000) of net income from those activities in this state
during the prior calendar year. Notwithstanding the preceding
sentence, a retailer engaging in convention and trade show
activities, as described in Section 513(d)(3)(A) of the Internal
Revenue Code, is a "retailer engaged in business in this state," and
is liable for collection of the applicable use tax, with respect to
any sale of tangible personal property occurring at the convention
and trade show activities and with respect to any sale of tangible
personal property made pursuant to an order taken at or during those
convention and trade show activities.
(f) Any limitations created by this section upon the definition of
"retailer engaged in business in this state" shall only apply for
purposes of tax liability under this code. Nothing in this section is
intended to affect or limit, in any way, civil liability or
jurisdiction under Section 410.10 of the Code of Civil Procedure.