BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 143
                                                                  Page  1

          Date of Hearing:   May 24, 2013

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                    AB 143 (Holden) - As Amended:  April 8, 2013 

          Policy Committee:                              Revenue and  
          Taxation     Vote:                            9-0

          Urgency:     No                   State Mandated Local Program:  
          Yes    Reimbursable:              No

           SUMMARY  

          This bill exempts from use tax, qualified tangible personal  
          property (TPP) purchased by a qualified service member or a  
          qualified service member's spouse or registered domestic  
          partner, while outside the state and prior to the date the  
          service member transfers into this state.   Provides the  
          provisions of this bill will become inoperative on January 1,  
          2019.

           FISCAL EFFECT  

          Negligible fiscal impact.
            
           COMMENTS  

           1)Purpose  .  According to the author, in the recent two wars,  
            over two million American military personnel have been called  
            to serve in Afghanistan and Iraq, and more than 40% have been  
            deployed more than once.  California is home to 13% of the  
            active duty members stationed in the United States.  The  
            author notes under current law, any purchases by an active  
            duty member of the military from an out-of-state retailer  
            would be subjected to use tax, if the military member were to  
            be redeployed to California within three months of purchase.   
            The author states AB 143 would exempt active military members  
            who are transferring into California on official military  
            business from an unnecessary tax burden.  

           2)Background.   If TPP is bought outside of California and  
            intended for use in this state it is subject to use tax if the  
            property's first functional use is in California.  Even when  








                                                                  AB 143
                                                                  Page  2

            the property's first functional use occurs outside California,  
            however, existing law nevertheless presumes that it was  
            purchased for use in this state if it is brought into  
            California within 90 days of purchase.



           Analysis Prepared by  :    Roger Dunstan / APPR. / (916) 319-2081