BILL ANALYSIS Ó AB 163 Page 1 Date of Hearing: April 17, 2013 ASSEMBLY COMMITTEE ON APPROPRIATIONS Mike Gatto, Chair AB 163 (Atkins) - As Amended: April 9, 2013 Policy Committee: Revenue and Taxation Vote: 9-0 Urgency: No State Mandated Local Program: No Reimbursable: SUMMARY This bill extends until January 1, 2024, the current sales and use tax exemption for tangible personal property sold by thrift stores located on a military installation and operated by an entity that provides financial, educational and other assistance to member of the armed forces, eligible family members and survivors. FISCAL EFFECT The BOE estimates that this exemption results in annual state and local sales and use tax revenue losses of approximately $15,000. COMMENTS 1)Purpose . According to the author, this bill was introduced to continue the sales and use tax exemption for the Navy-Marine Corps Relief Society thrift stores on military bases. The author notes this exemption was created in 2009 and will expire if no action is taken. These stores operated by the society use their income to provide financial, educational and other general assistance to active duty and retired services members, families and survivors. The author notes the proceeds from these thrift stores have provided $13.4 million in financial assistance, and 3,500 military families have taken financial education classes. The author points out that other thrift stores such as Goodwill and the Salvation Army are already exempt from the sales and use tax, an exemption that has existed since 1959. AB 163 Page 2 2)Background. SB 765 (Dutton), Chapter 615, Statutes of 2009, first established the sales and use tax exemption for military thrift stores. Although the provisions of the bill would apply to all thrift stores run by what are termed military welfare societies, only the Navy-Marine Corps Relief Society operates stores in California. The Society, working in partnership with the Navy and Marine Corps, operates 27 thrift stores, seven of which are located at naval or marine bases in California. These thrift stores sell used clothing, uniforms and household items to service members and their families. The proceeds are returned to the Navy and Marine Corps community in the form of relief services. 3)There is no registered opposition to this bill . Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081