BILL ANALYSIS Ó
SB 805
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Date of Hearing: July 6, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 805 (Committee on Veteran Affairs) - As Amended: June 20,
2011
Policy Committee: Revenue and
Taxation Vote: 7-0
Urgency: Yes State Mandated Local Program:
Yes Reimbursable: Yes
SUMMARY
This bill amends the sunset date for the provisions of the sales
and use tax law that currently classify a qualified itinerant
vendor who meets specified criteria, including being a disabled
veteran, as a consumer, not a retailer, of specified tangible
personal property that is sold by the vendor. Specifically,
this bill:
1)Deletes the January 1, 2012 sunset date and establishes a new
sunset date of January 1, 2022.
2)Provides that, notwithstanding existing law, the state shall
not reimburse local agencies for sales and use tax revenues
lost as a result of this bill.
3)Takes immediate effect as a tax levy.
FISCAL EFFECT
There will be minor absorbable costs to the Board of
Equalization (BOE) to administer this bill. The estimated sales
and use tax loss is about $22,000 annually, with the state
amount to be approximately $14,000 and locals and transit
$8,000.
COMMENTS
1.Purpose . This bill is sponsored by BOE to enable qualifying
veterans to retain their consumer status with respect to their
itinerant sales. According to BOE, defining qualifying
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vendors as consumers minimizes reporting and tax collecting
burdens for smaller businesses and entities. As consumers
they will still pay tax on their cost of taxable goods they
sell. BOE notes that consumer reporting status for good they
sell has been extended to such entities as nonprofit youth
groups, Parent-Teacher Associations, nonprofit veterans'
organizations, various charitable organizations, schools and
school districts, optometrists, veterinarians, podiatrists,
licensed hearing aid dispensers among others.
BOE argues that this provision represents one small step
towards recognizing our disabled veterans who have already
made, or are making the transition from military to civilian
employment, and it should not be allowed to sunset. BOE notes
this provision eliminates the need for qualifying disabled
veterans without employees or a permanent place of business to
hold a seller's permit, file sales tax returns and collect and
remit sales tax.
1.Background . The provisions granting consumer reporting status
to qualified itinerant veterans were added to law by SB 809
(Committee on Veterans Affairs), Chapter 621, Statutes of
2009. This bill was enacted to resolve a long-running
controversy over veteran's exemptions. For several years
preceding SB 809's enactment, a number of veterans argued that
existing law already exempted honorably discharged veterans
from sales tax on sales of food and carbonated beverages from
a mobile cart.
However, supported by opinions from the Attorney General and
Legislative Counsel, BOE adopted the position that, while
existing law exempts honorably discharged veterans from
locally imposed license taxes and fees, it does not provide an
exemption from sales and use tax. Thus, SB 809 was passed in
an effort to address this issue, and explicitly grants
preferential treatment to honorably discharged itinerant
veterans under the sales and use tax law.
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081
SB 805
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