BILL NUMBER: AB 2688	AMENDED
	BILL TEXT

	AMENDED IN SENATE  AUGUST 6, 2012
	AMENDED IN SENATE  JUNE 26, 2012
	AMENDED IN SENATE  JUNE 18, 2012

INTRODUCED BY   Committee on Revenue and Taxation (Perea (Chair),
Beall, Charles Calderon, Cedillo, Fuentes, and Gordon)

                        MARCH 12, 2012

   An act to amend Sections 1154, 6055,  and  6203.5
 , 7261, and 7262  of the Revenue and Taxation Code,
relating to taxation.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2688, as amended, Committee on Revenue and Taxation. Property
 taxes and transaction and use taxes.   taxes:
sales and use taxes. 
   Existing law requires the personal property of an air carrier to
be taxed at its fair market value, and the California Constitution
requires property subject to ad valorem property taxation to be
assessed in the county in which it is situated. Existing law requires
air taxis which are operated in scheduled air taxi operations to be
assessed pursuant to a specified formula, and requires all other air
taxis to be assessed in the same manner as personal property, as
provided. Existing law defines "air taxi" for purposes of these
provisions to mean an aircraft used by an air carrier which does not
utilize aircraft having a maximum passenger capacity, as provided,
and which does not hold a specified certificate or other economic
authority, as provided.
   The bill would revise the definition of "air taxi," as provided.
   Existing sales and use tax laws authorize a deduction or refund of
tax in the case of worthless and written-off accounts held by a
retailer or lender under specified circumstances, which include
establishing a proper election by filing an election with the State
Board of Equalization before claiming the deduction or refund.
   This bill would instead require the proper election to be
established by the retailer and lender preparing and retaining an
election form that would not need to be prepared or retained prior to
claiming any deduction or refund. 
   Existing laws authorize districts, as specified, to levy,
increase, or extend a transactions and use tax in accordance with the
Transactions and Use Tax Law. The Transactions and Use Tax Law
requires that the ordinance proposing the tax include certain
provisions, including a provision imposing a transactions and use tax
at a rate of 0.25%, or a multiple thereof.  
   This bill would instead authorize the levy, increase, or extension
of a transactions and use tax at a rate of 0.125%, or a multiple
thereof. 
   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 1154 of the Revenue and Taxation Code is
amended to read:
   1154.  (a) As used in this section, "air taxi" means aircraft used
by an air carrier which does not utilize aircraft having a maximum
passenger capacity of more than 60 seats or a maximum payload
capacity of more than 18,000 pounds in air transportation and which
holds a certificate of public convenience and necessity or other
economic authority issued by the United States Department of
Transportation, or its successor.
   (b) Air taxis which are operated in scheduled air taxi operations
are not subject to the provisions of Part 10 (commencing with Section
5301) of this division and shall be assessed in accordance with the
allocation formula set forth in Section 1152.
   (c) All other air taxis shall be assessed in the county where the
aircraft is habitually situated in the same manner and at the same
ratio as other personal property in the county subject to general
property taxation. Such aircraft shall be taxed at the same rate and
in the same manner as all other property on the unsecured roll.
  SEC. 2.  Section 6055 of the Revenue and Taxation Code is amended
to read:
   6055.  (a) A retailer is relieved from liability for sales tax
that became due and payable, insofar as the measure of the tax is
represented by accounts that have been found to be worthless and
charged off for income tax purposes by the retailer or, if the
retailer is not required to file income tax returns, charged off in
accordance with generally accepted accounting principles. A retailer
that has previously paid the tax may, under rules and regulations
prescribed by the board, take as a deduction the amount found
worthless and charged off by the retailer. If these accounts are
thereafter in whole or in part collected by the retailer, the amount
collected shall be included in the first return filed after the
collection and the tax shall be paid with the return. For purposes of
this subdivision, the term "retailer" shall include any entity
affiliated with the retailer under Section 1504 of Title 26 of the
United States Code.
   (b) (1) In the case of accounts held by a lender, a retailer or
lender that makes a proper election under paragraph (4) shall be
entitled to a deduction or refund of the tax that the retailer has
previously reported and paid if all of the following conditions are
met:
   (A) A deduction was not previously claimed or allowed on any
portion of the accounts.
   (B) The accounts have been found worthless and written off by the
lender in accordance with the requirements of subdivision (a).
   (C) The contract between the retailer and the lender contains an
irrevocable relinquishment of all rights to the account from the
retailer to the lender.
   (D) The retailer remitted the tax on or after January 1, 2000.
   (E) The party electing to claim the deduction or refund under
paragraph (4) files a claim in a manner prescribed by the board.
   (2) If the retailer or the lender thereafter collects in whole or
in part any accounts, one of the following shall apply:
   (A) If the retailer is entitled to the deduction or refund under
the election specified in paragraph (4), the retailer shall include
the amount collected in its first return filed after the collection
and pay tax on that amount with the return.
   (B) If the lender is entitled to the deduction or refund under the
election specified in paragraph (4), the lender shall pay the tax to
the board in accordance with Section 6451.
   (3) For purposes of this subdivision, the term "lender" means any
of the following:
   (A) Any person that holds a retail account which that person
purchased directly from a retailer who reported the tax.
   (B) Any person that holds a retail account pursuant to that person'
s contract directly with the retailer that reported the tax.
   (C) Any person that is either an affiliated entity, under Section
1504 of Title 26 of the United States Code, of a person described in
subparagraph (A) or (B), or an assignee of a person described in
subparagraph (A) or (B).
   (4) For purposes of this section, a "proper election" shall be
established when the retailer that reported the tax and the lender
prepare and retain an election form, signed by both parties,
designating which party is entitled to claim the deduction or refund.
This election may not be amended or revoked unless a new election,
signed by both parties, is prepared and retained by the retailer and
the lender.
  SEC. 3.  Section 6203.5 of the Revenue and Taxation Code is amended
to read:
   6203.5.  (a) A retailer is relieved from liability to collect use
tax that became due and payable, insofar as the measure of the tax is
represented by accounts that have been found to be worthless and
charged off for income tax purposes by the retailer or, if the
retailer is not required to file income tax returns, charged off in
accordance with generally accepted accounting principles. A retailer
that has previously paid the amount of the tax may, under rules and
regulations prescribed by the board, take as a deduction the amount
found worthless and charged off by the retailer. If these accounts
are thereafter in whole or in part collected by the retailer, the
amount collected shall be included in the first return filed after
the collection and the amount of the tax shall be paid with the
return. For purposes of this subdivision, the term "retailer" shall
include any entity affiliated with the retailer under Section 1504 of
Title 26 of the United States Code.
   (b) (1) In the case of accounts held by a lender, a retailer or
lender that makes a proper election under paragraph (4) shall be
entitled to a deduction or refund of the tax that the retailer has
previously reported and paid if all of the following conditions are
met:
   (A) A deduction was not previously claimed or allowed on any
portion of the accounts.
   (B) The accounts have been found worthless and written off by the
lender in accordance with the requirements of subdivision (a).
   (C) The contract between the retailer and the lender contains an
irrevocable relinquishment of all rights to the account from the
retailer to the lender.
   (D) The retailer remitted the tax on or after January 1, 2000.
   (E) The party electing to claim the deduction or refund under
paragraph (4) files a claim in a manner prescribed by the board.
   (2) If the retailer or the lender thereafter collects in whole or
in part any accounts, one of the following shall apply:
   (A) If the retailer is entitled to the deduction or refund under
the election specified in paragraph (4), the retailer shall include
the amount collected in its first return filed after the collection
and pay tax on that amount with the return.
   (B) If the lender is entitled to the deduction or refund under the
election specified in paragraph (4), the lender shall pay the tax to
the board in accordance with Section 6451.
   (3) For purposes of this subdivision, the term "lender" means any
of the following:
   (A) Any person that holds a retail account which that person
purchased directly from a retailer who reported the tax.
   (B) Any person that holds a retail account pursuant to that person'
s contract directly with the retailer that reported the tax.
   (C) Any person that is either an affiliated entity, under Section
1504 of Title 26 of the United States Code, of a person described in
subparagraph (A) or (B), or an assignee of a person described in
subparagraph (A) or (B).
   (4) For purposes of this section, a "proper election" shall be
established when the retailer that reported the tax and the lender
prepare and retain an election form, signed by both parties,
designating which party is entitled to claim the deduction or refund.
This election may not be amended or revoked unless a new election,
signed by both parties, is prepared and retained by the retailer and
the lender. All matter omitted in this version of the bill appears in
the bill as amended in the Senate, June 26, 2012. (JR11)