California Legislature—2013–14 Regular Session

Assembly Bill No. 760

Introduced by Assembly Member Dickinson

(Principal coauthor: Senator Steinberg)

February 21, 2013

An act to amend Section 1656.1 of the Civil Code, and to add Part 14.5 (commencing with Section 33001) to Division 2 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.

LEGISLATIVE COUNSEL’S DIGEST

AB 760, as introduced, Dickinson. Taxes: ammunition sales.

Existing sales and use tax laws impose taxes on retailers measured by the gross receipts from the sale of tangible personal property sold at retail in this state, or on the storage, use, or other consumption in this state of tangible personal property purchased from a retailer for storage, use, or other consumption in this state.

This bill would impose a tax upon retailers for the privilege of selling ammunition, as defined, at the rate of $0.05 per item of ammunition sold in this state on or after January 1, 2014. It would also impose a complemental excise tax on the storage, use, or other consumption in this state of ammunition purchased from a retailer for storage, use, or other consumption in this state, as provided. The tax would be collected pursuant to the procedures set forth in the Fee Collection Procedures Law. This bill would require that revenues collected pursuant to these taxes be allocated to the School-Based Early Mental Health Intervention and Prevention Services Matching Grant Program.

Because this bill would expand the scope of the Fee Collection Procedures Law, the violation of which is a crime, it would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of 2⁄3 of the membership of each house of the Legislature.

This bill would take effect immediately as a tax levy.

Vote: ²⁄₃. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

SECTION 1.  

The Legislature finds and declares all of the
following:

(a) California has long recognized the relationship between
mental health and gun violence by enacting several laws restricting
the ownership of guns by individuals who have been identified as
suffering from mental disorders or as not in control of all of their
mental faculties.

(b) There is evidence that people with severe mental illness
have a higher risk of committing violent acts than the general
population. The National Institute of Mental Health found that the
lifetime prevalence of violence among people with serous mental
illness was 16 percent, compared with 7 percent among people
without any mental disorder.

(c) However, the ability of mental health professionals to predict
any particular mental disorder or disordered individual as being
likely responsible for and likely to commit an act of violence with
a deadly weapon is weak.

(d) Reducing mental illness, in conjunction with restricting
mentally disordered persons from owning guns, has been seen as
a productive approach for reducing the risk of mentally disordered
individuals to commit acts of violence with a deadly weapon.

(e) Research has found that there is a clear relationship between
early adjustment problems and later adolescent problems, and
many of these adjustment problems are due to mild to moderate
mental disorders among school age children. In many cases, signs
of these problems can be detected in early school grades.

(f) In 1991 California enacted the School-Based Early Mental
Health Intervention and Prevention Services Matching Grant
program (EMHI). This program is intended to ensure that pupils
will receive the benefits of school-based early mental health
intervention and prevention services that will enhance the mental
health and social development of children.

(g) Scientific evaluation of EMHI has shown dramatic
improvements in adjustment behavior among children in grades
1 to 3, inclusive, and success in reducing the incidence of early
mild to moderate mental illness. Further, the improvement in
children’s behavior has been shown to continue through their later
school years.

(h) Due to state budget constraints EMHI was defunded in the
2012-13 Budget Act. The Legislature, therefore, finds and declares
that providing a source of stable revenue to continue the EMHI
matching grants is in California’s best interest, both in economic
and human terms, to identify and treat the minor and moderate
mental difficulties that children experience before they become
serious mental disorders. The Legislature further finds and declares
that a reduction in the incidence of mental illness is likely to reduce
acts of violence committed with a deadly weapon in our state, and
therefore a tax on the sale of ammunition is a means of refunding
the EMHI program.

SEC. 2.  

Section 1656.1 of the Civil Code is amended to read:

1656.1.  

(a) Whether a retailer may add sales tax reimbursement
to the sales price of the tangible personal property sold at retail to
a purchaser depends solely upon the terms of the agreement of
sale. It shall be presumed that the parties agreed to the addition of
sales tax reimbursement to the sales price of tangible personal
property sold at retail to a purchaser if:

(1) The agreement of sale expressly provides for such addition
of sales tax reimbursement;

(2) Sales tax reimbursement is shown on the sales check or other
proof of sale; or

(3) The retailer posts in his or her premises in a location visible
to purchasers, or includes on a price tag or in an advertisement or
other printed material directed to purchasers, a notice to the effect
that reimbursement for sales tax will be added to the sales price
of all items or certain items, whichever is applicable.

(b) It shall be presumed that the property, the gross receipts
from the sale of which is subject to the sales tax, is sold at a price
which includes tax reimbursement if the retailer posts in his or her
premises, or includes on a price tag or in an advertisement
(whichever is applicable) one of the following notices:

(1) “All prices of taxable items include sales tax reimbursement
computed to the nearest mill.”

(2) “The price of this item includes sales tax reimbursement
computed to the nearest mill.”

(c) (1) The State Board of Equalization shall prepare and make
available for inspection and duplication or reproduction a sales
tax reimbursement schedule which shall be begin delete identical with the
following tables up to the amounts specified therein: end delete begin insert set fourth the
various rates of tax then in effect as applied to price ranges from
$.01 to at least $1.00. end insert

 

begin delete

43⁄4 percent
Price   Tax
.01- .10     .00
.11- .31     .01
.32- .52     .02
.53- .73     .03
.74- .94     .04
.95-1.15     .05
5 percent
Price   Tax
.01- .09     .00
.10- .29     .01
.30- .49     .02
.50- .69     .03
.70- .89     .04
.90-1.09     .05
51⁄4 percent
Price   Tax
.01- .09     .00
.10- .28     .01
.29- .47     .02
.48- .66     .03
.67- .85     .04
.86-1.04     .05
51⁄2 percent
Price   Tax
.01- .09     .00
.10- .27     .01
.28- .45     .02
.46- .63     .03
.64- .81     .04
.82- .99     .05
1.00-1.18     .06
53⁄4 percent
Price   Tax
.01- .08     .00
.09- .26     .01
.27- .43     .02
.44- .60     .03
.61- .78     .04
.79- .95     .05
.96-1.13     .06
6 percent
Price   Tax
.01- .08     .00
.09- .24     .01
.25- .41     .02
.42- .58     .03
.59- .74     .04
.75- .91     .05
.92-1.08     .06
61⁄4 percent
Price   Tax
.01- .07     .00
.08- .23     .01
.24- .39     .02
.40- .55     .03
.56- .71     .04
.72- .87     .05
.88-1.03     .06
61⁄2 percent
Price   Tax
.01- .07     .00
.08- .23     .01
.24- .38     .02
.39- .53     .03
.54- .69     .04
.70- .84     .05
.85- .99     .06
1.00-1.15     .07
63⁄4 percent
Price   Tax
.01- .07     .00
.08- .22     .01
.23- .3 7    .02
.38- .5 1    .03
.52- .66     .04
.67- .81     .05
.82- .96     .06
.97-1.11     .07
7 percent
Price   Tax
.01- .07     .00
.08- .21     .01
.22- .35     .02
.36- .49     .03
.50- .64     .04
.65- .78     .05
.79- .92     .06
.93-1.07     .07
71⁄4 percent
Price   Tax
.01- .06     .00
.07- .20     .01
.21- .34     .02
.35- .48     .03
.49- .62     .04
.63- .75     .05
.76- .89     .06
.90-1.03     .07
71⁄2 percent
Price   Tax
.01- .06     .00
.07- .19     .01
.20- .33     .02
.34- .46     .03
.47- .59     .04
.60- .73     .05
.74- .86     .06
.87- .99     .07
1.00-1.13     .08

end delete

 

(2) Reimbursement on sales prices in excess of those shown in
the schedules begin insert prepared pursuant to paragraph (1) end insert may be
computed by applying the applicable tax rate to the sales price,
rounded off to the nearest cent by eliminating any fraction less
than one-half cent and increasing any fraction of one-half cent or
over to the next higher cent.

(3) If sales tax reimbursement is added to the sales price of
tangible personal property sold at retail, the retailer shall use a
schedule provided by the board, or a schedule approved by the
board.

(d) The presumptions created by this section are rebuttable
presumptions.

begin insert

(e) For purposes of this section, as applied to Part 14.5 of
Division 2 of the Revenue and Taxation Code, sales tax
reimbursement shall refer to reimbursement for the tax imposed
by that part, and tangible personal property shall include
ammunition as defined under that part.

end insert

SEC. 3.  

Part 14.5 (commencing with Section 33001) is added
to Division 2 of the Revenue and Taxation Code, to read:

 

PART 14.5.  Ammunition Tax Law

 

Chapter  1. General Provisions and Definitions

 

33001.  

This part is known and may be cited as the
“Ammunition Tax Law.”

33011.  

For purposes of this part:

(a) “Ammunition” means projectiles with their fuse, propelling
charges, or primers fired from a weapon, or any of the individual
components thereof, including without limitation shot, sharpel
bullets, or shells. “Ammunition” shall not include a BB or a pellet
commonly used in an air rifle or air pistol.

(b) “Retailer engaged in business in this state” has the same
meaning as defined in Section 6203.

33012.  

Unless the context otherwise requires the definition
provided in Chapter 1 (commencing with Section 6001) of Part 1
of Division 2 govern the construction of this part.

 

Chapter  2. Imposition of Tax and Excise Tax

 

33021.  

For the privilege of selling ammunition at retail there
is hereby imposed a tax upon all retailers at the rate of five cents
($0.05) per item of ammunition sold at retail in this state on or
after January 1, 2014.

33022.  

(a) An excise tax is hereby imposed on the storage,
use, or other consumption in this state of an item of ammunition
purchased from any retailer on or after January 1, 2014, for storage,
use, or other consumption in this state at the rate of five cents
($0.05) per item of ammunition.

(b) Every person storing, using, or otherwise consuming in this
state munitions purchased from a retailer is liable for the tax. His
or her liability is not extinguished until the tax has been paid to
this state except that a receipt from a retailer engaged in business
in this state or from a retailer who is authorized by the board, under
the rules and regulations as it may prescribe, to collect the tax and
who is, for the purposes of this part relating to the use tax, regarded
as a retailer engaged in business in this state, given to the purchaser
pursuant to subdivision (c) is sufficient to relieve the purchaser
from further liability for the tax to which the receipt refers.

(c) Every retailer engaged in business in this state and making
sales of tangible personal property for storage, use, or other
consumption in this state, not exempted under Chapter 3
(commencing with Section 33031), shall, at the time of making
the sales or, if the storage, use, or other consumption of the
munitions is not then taxable hereunder, at the time the storage,
use, or other consumption becomes taxable, collect the tax from
the purchaser and give to the purchaser a receipt therefor in the
manner and form prescribed by the board.

(d) The tax required to be collected by the retailer and any
amount unreturned to the customer which is not tax but was
collected from the customer under the representation by the retailer
that it was tax constitutes debts owed by the retailer to this state.

(e) It is unlawful for any retailer to advertise or hold out or state
to the public or to any customer, directly or indirectly, that the tax
or any part thereof will be assumed or absorbed by the retailer or
that it will not be added to the selling price of the property sold or
that if added it or any part thereof will be refunded.

(f) The tax required to be collected by the retailer from the
purchaser shall be displayed separately from the list price, the price
advertised in the premises, the marked price, or other price on the
sales check or other proof of sales.

(g) Any person violating subdivision (c), (e), or (f) is guilty of
a misdemeanor.

 

Chapter  3. Exemption

 

33031.  

There are exempted from the taxes imposed by this
part, the sale of, or the storage, use or other consumption of any
item of ammunition purchased by any peace officer required to
carry a weapon requiring ammunition while on duty, or by any
governmental law enforcement agency employing that peace
officer, for use in the normal course of employment.

 

Chapter  4. Collection and Administration

 

33041.  

The board shall administer and collect the tax imposed
by this part pursuant to the Fee Collection Procedures Law (Part
30 (commencing with Section 55001) of Division 2). For purposes
of this part, the references in the Fee Collection Procedures Law
to “fee” shall include the tax imposed by this part, and to
“feepayer” shall mean any person liable for the payment of the
taxes collected pursuant to that part.

33042.  

The taxes imposed by this part are due and payable to
the board quarterly on or before the last day of the month next
succeeding each quarterly period.

33043.  

On or before the last day of the month following each
quarterly period of three months, a return for the preceding
quarterly period shall be filed with the board.

 

Chapter  5. Disposition of Proceeds

 

33051.  

All taxes, interest, and penalties imposed and required
to be paid under this part shall be made in remittances to the board.

33052.  

All taxes, interest, and penalties, less refunds and costs
of collection, in this fund shall, upon appropriation by the
Legislature, only be allocated to the School-Based Early Mental
Health Intervention and Prevention Services Matching Grant
Program (Chapter 2 (commencing with Section 4380) of Part 4 of
Division 4 of the Welfare and Institutions Code).

SEC. 4.  

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.

SEC. 5.  

This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.