BILL ANALYSIS Ó SENATE GOVERNANCE & FINANCE COMMITTEE Senator Lois Wolk, Chair BILL NO: AB 2270 HEARING: 6/27/12 AUTHOR: Harkey FISCAL: Yes VERSION: 4/17/12 TAX LEVY: No CONSULTANT: Miller SALES AND USE TAX: USE TAX ADMINSTRATION Sets April 15th as the due date for "eligible purchasers" whose purchases were taxable the preceding calendar year. Background and Existing Law Current existing law imposes a sales tax and complementary use tax on retailers for the privilege of selling tangible personal property based upon the retailer's gross receipts in this state, unless specifically exempted. The use tax is imposed on the purchaser for the storage, use, or other consumption in this state of goods purchased from any retailer. The standard statewide sales and use tax is 7.25%. Cities, counties and special districts may impose an additional transactions and use tax (sales tax) with voter approval as well. Current law allows taxpayers to pay their use tax liability either directly to the BOE by January 31st or on their income tax returns by April 15th. Proposed Law Assembly Bill 2270 provides that the "qualified use tax" as defined by current law of an "eligible purchaser" defined as a purchaser of goods subject to the use tax shall be due and payable to BOE on or before April 15th following the close of the calendar year in which the use tax liability was incurred. The eligible purchaser also is not required registered with the BOE. The bill specifies that "qualified use tax" does not include the use tax imposed on specified mobile homes, vehicles, and leases. State Revenue Impact AB 2270 -- 4/17/12 -- Page 2 According to the BOE, this bill would have negligible impacts on state and local revenue. Comments 1. Purpose of the bill . This bill is sponsored by the BOE to make tax payment deadlines more consistent. Under current law, a taxpayer may file his or her use tax on the income tax return by April 15th but must file his or her use tax payment directly with the BOE by January 31st. If the taxpayer pays the tax directly to the BOE on April 15th, he or she would be considered late and the individual would be subjected to the late payment penalty and interest. This bill makes the dates consistent and less confusing for the taxpayer. Assembly Actions Assembly Revenue and Taxation: 8-0 Assembly Appropriations: 16-0 Assembly Floor: 72-0 Support and Opposition (6/21/12) Support : Board of Equalization (sponsor); Senator George Runner (Ret.), BOE Member. Opposition : Unknown.