BILL ANALYSIS                                                                                                                                                                                                    



                                                                  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