BILL ANALYSIS Ó
-----------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 919|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
-----------------------------------------------------------------
THIRD READING
Bill No: AB 919
Author: Williams (D)
Amended: 8/4/14 in Senate
Vote: 27
SENATE GOVERNANCE & FINANCE COMMITTEE : 6-1, 6/11/14
AYES: Knight, Beall, DeSaulnier, Hernandez, Liu, Walters
NOES: Wolk
SENATE APPROPRIATIONS COMMITTEE : 5-0, 8/14/14
AYES: De León, Hill, Lara, Padilla, Steinberg
NO VOTE RECORDED: Walters, Gaines
ASSEMBLY FLOOR : 78-0, 1/30/14 - See last page for vote
SUBJECT : Sales and use taxes: veterans: itinerant vendors:
repayment
SOURCE : Board of Equalization
DIGEST : This bill enables a "qualified veteran" to receive
from the state a "qualified repayment" of state and local sales
taxes paid to the Board of Equalization (BOE) during the
eight-year period beginning on and after April 1, 2002, and
before April 1, 2010.
ANALYSIS : Existing law imposes a sales tax on retailers for
the privilege of selling tangible personal property (TPP),
absent a specific exemption. The tax is based upon the
retailer's gross receipts from TPP sales in this state.
CONTINUED
AB 919
Page
2
Existing law imposes a complementary use tax on the storage,
use, or other consumption in this state of TPP purchased from
any retailer. The use tax is imposed on the purchaser, and
unless the purchaser pays the use tax to a retailer registered
to collect, the purchaser is liable for the tax. The use tax is
set at the same rate as the state's sales tax and must be
remitted to BOE.
Generally, retailers must obtain a seller's permit and report
the sales and use tax on a BOE prescribed return, unless
designated as "consumers." In which case, they neither obtain a
seller's permit nor report the tax on sales. Instead, consumers
pay tax when they purchase taxable products intended for sale.
Various classes of retailers are classified as consumers,
including qualified itinerant vendors (QIV). A QIV is a person
that:
Was a member of the Armed Forces of the United States (U.S.),
who received an honorable discharge or release from active
duty under honorable conditions;
Is unable to obtain a livelihood by manual labor due to a
service-connected disability;
Is a sole proprietor with no employees; and
Has no permanent place of business in this state.
This bill:
1.Enables a "qualified veteran" to receive from the state a
"qualified repayment" of state and local sales taxes paid to
the BOE during the eight-year period beginning on and after
April 1, 2002, and before April 1, 2010.
2.Defines a "qualified veteran" as a person who met the
requirements of a QIV during the period in which the sales
were made, and paid to the BOE state and local sales taxes
during the period beginning April 1, 2002, and before April 1,
2010. To qualify, the QIV must also not have collected sales
tax from customers.
3.Defines a "qualified repayment" as an amount equal to the
CONTINUED
AB 919
Page
3
state and local sales taxes paid during the period beginning
April 1, 2002, and before April 1, 2010, less any amounts
previously refunded, credited or paid through any means.
4.Limits the allowable repayment amount to $50,000.
5.Requires the BOE to report to specified legislative
committees, by May 1, 2016, the names and the repayment amount
of each qualified veteran who was issued a repayment.
6.Requires the State Controller to transfer back any used
portion of this bill's appropriation back to the General Fund.
Prior Legislation
AB 855 (Ma of 2011) would have retroactively applied
preferential consumer status to QIVs as of January 1, 1986. AB
855 was never heard in the Senate Governance and Finance
Committee.
SB 805 (Committee on Veterans Affairs, Chapter 246, Statutes of
2011) as originally introduced, would have deleted outright the
sunset date for the provisions of the SUT Law that currently
classify a QIV as a consumer, and not a retailer, of specified
TPP the QIV sells. SB 805 was instead amended in the Senate
Governance and Finance Committee to extend the sunset date for
the preferential consumer status provisions from January 1,
2012, until January 1, 2022.
SB 809 (Committee on Veterans Affairs, Chapter 621, Statutes of
2009) provided that a QIV is a consumer, and not a retailer, of
TPP the QIV owns and sells, except alcoholic beverages or TPP
sold for more than $100.
AB 3009 (Brownley, of 2007) would have provided that, for
purposes of the SUT Law, certain U.S. veterans shall be
considered consumers of, and not retailers of, food products and
nonalcoholic beverages they sell. AB 3009 was held in the
Assembly Committee on Revenue and Taxation.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
CONTINUED
AB 919
Page
4
This bill contains a one-time $50,000 General Fund
appropriation to the State Controller's Office for repayments,
as specified. A cost pressure could result to the extent that
total claims for repayments exceed $50,000.
BOE indicates this bill will result in one-time costs of less
than $10,000 (General Fund).
SUPPORT : (Verified 8/14/14)
Board of Equalization (source)
American Legion Auxiliary, Unit 49
American Legion Department of California
AMVETS, Department of California
California Association of County Veterans Service Officer
California State Commanders Veterans Council
Carpinteria Valley Chamber of Commerce
City of Carpinteria
County of Santa Barbara
Military Officers Association of America California Council of
Chapters
Military Order of the Purple Heart, Chapter 750
Veterans Caucus of the California Democratic Party
Veterans Coordinating Council of Santa Barbara
Veterans of Foreign Wars Department of California
Vietnam Veterans of America California State Council
ARGUMENTS IN SUPPORT : According to the author, "This bill is
necessary because hard-working disabled veteran vendors
misunderstood Section 16102 of the B&P Code. Veteran vendors
did not collect sales tax reimbursement for customers, resulting
in thousands of dollars paid out of pocket by qualified
itinerant vendors to the BOE."
ASSEMBLY FLOOR : 78-0, 1/30/14
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Chávez, Chesbro, Conway, Cooley,
Dababneh, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox,
Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon,
Gorell, Gray, Grove, Hagman, Hall, Harkey, Roger Hernández,
Holden, Jones, Jones-Sawyer, Levine, Linder, Lowenthal,
Maienschein, Mansoor, Medina, Morrell, Mullin, Muratsuchi,
CONTINUED
AB 919
Page
5
Nazarian, Nestande, Olsen, Pan, Patterson, Perea, V. Manuel
Pérez, Quirk, Quirk-Silva, Rendon, Ridley-Thomas, Rodriguez,
Salas, Skinner, Stone, Ting, Wagner, Waldron, Weber,
Wieckowski, Wilk, Williams, Yamada, John A. Pérez
NO VOTE RECORDED: Logue, Melendez
AB:e 8/16/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****
CONTINUED