SB 19, as amended, Knight. Sales and use taxes: exemptions: property for use in space flight.
Existing sales and use tax laws impose a tax 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. The Sales and Use Tax Law provides various exemptions from those taxes, including an exemption for the gross receipts from the sale of, and the storage, use, or other consumption of, qualified property for use in space flight.
This bill wouldbegin insert, until January 1, 2024,end insert expand this exemption to also include equipment and materials used to construct, reconstruct, or improve new or existing facilities designed to launch, manufacture, fabricate, assemble, or process equipment that facilitates the renovation, rehabilitation, or reconstruction of commercial space launch sites.begin insert This bill would require the Legislative Analyst’s Office, by January 1, 2023, with information provided by the State Board of Equalization, to report to the Legislature on the effect of the exemption on employment and investment in the commercial space flight industry, using data, including, but not limited to, that produced by the Employment Development Department Labor Market Information Division.end insert
The Bradley-Burns Uniform Local Sales and Use Tax Law authorizes counties and cities to impose local sales and use taxes in conformity with the Sales and Use Tax Law, and existing law authorizes districts, as specified, to impose transactions and use taxes in accordance with the Transactions and Use Tax Law, which conforms to the Sales and Use Tax Law. Amendments to state sales and use taxes are incorporated into these laws.
Section 2230 of the Revenue and Taxation Code provides that the state will reimburse counties and cities for revenue losses caused by the enactment of sales and use tax exemptions.
This bill would provide that, notwithstanding Section 2230 of the Revenue and Taxation Code, no appropriation is made and the state shall not reimburse any local agencies for sales and use tax revenues lost by them pursuant to this bill.
This bill would take effect immediately as a tax levy, but its operative date would depend on its effective date.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.
The people of the State of California do enact as follows:
Section 6380 of the Revenue and Taxation Code
2 is amended to read:
(a) There are exempted from the taxes imposed by this
4part the gross receipts from the sale of, and the storage, use, or
5other consumption in this state of, qualified property for use in
6space flight.
7(b) For purposes of this section:
8(1) “Facilities designed to launch” includes, but is not limited
9to, a mission control center.
10(2) “Qualified property” means any of the following:
11(A) Tangible personal property that has space flight capability,
12including, but not
limited to, an orbital space facility, space
13propulsion system, space vehicle, satellite, or space station of any
14kind, and any component thereof.
15(B) Tangible personal property to be placed or used aboard any
16facility, system, vehicle, satellite, or station described in
17subparagraph (A), regardless of whether that property is to be
P3 1ultimately returned to this state for subsequent use, storage, or
2other consumption.
3(C) Tangible personal property in the form of equipment and
4materials used to construct, reconstruct, or improve new or existing
5facilities designed to launch, manufacture, fabricate, assemble, or
6process equipment that facilitates the renovation, rehabilitation,
7or reconstruction of commercial space launch sites.
8(D) Fuel of a quality that is not adaptable for use in ordinary
9motor vehicles, but is produced, sold, and used exclusively for
10space flight.
11(3) “Space flight” means any flight designed for suborbital,
12orbital, or interplanetary travel by a space vehicle, satellite, space
13facility, or space station of any kind.
14(c) The exemption established by this section shall not be denied
15by reason of a failure, postponement, or cancellation of a launch
16of a space vehicle, satellite, space facility, or space station of any
17kind, or the destruction of any launch vehicle or any component
18thereof.
19(d) The Legislative Analyst’s Office shall, by January 1,
2023,
20with information provided by the board, report to the Legislature
21on the effect of the exemption added by the act adding this
22subdivision on employment and investment in the commercial
23space flight industry, using data, including, but not limited to, that
24produced by the Employment Development Department Labor
25Market Information Division.
26(e) This section shall become inoperative on January 1, 2024,
27and is repealed as of that date.
begin insertSection 6380 is added to the end insertbegin insertRevenue and Taxation
29Codeend insertbegin insert, to read:end insert
(a) There are exempted from the taxes imposed by this
31part the gross receipts from the sale of, and the storage, use, or
32other consumption in this state of, qualified property for use in
33space flight.
34(b) For purposes of this section:
35(1) “Qualified property” means any of the following:
36(A) Tangible personal property that has space flight capability,
37including, but not limited to, an orbital space facility, space
38propulsion
system, space vehicle, satellite, or space station of any
39kind, and any component thereof.
P4 1(B) Tangible personal property to be placed or used aboard
2any facility, system, vehicle, satellite, or station described in
3subparagraph (A), regardless of whether that property is to be
4ultimately returned to this state for subsequent use, storage, or
5other consumption.
6(C) Fuel of a quality that is not adaptable for use in ordinary
7motor vehicles, but is produced, sold, and used exclusively for
8space flight.
9(2) “Space flight” means any flight designed for suborbital,
10orbital, or interplanetary travel by a space vehicle, satellite, space
11
facility, or space station of any kind.
12(c) The exemption established by this section shall not be denied
13by reason of a failure, postponement, or cancellation of a launch
14of a space vehicle, satellite, space facility, or space station of any
15kind, or the destruction of any launch vehicle or any component
16thereof, but the exemption shall not apply to any material that is
17not intended to be launched into space.
18(d) This section shall become operative on January 1, 2024.
Notwithstanding Section 2230 of the Revenue and
21Taxation Code, no appropriation is made by this act and the state
22shall not reimburse any local agency for any sales and use tax
23revenues lost by it under this act.
This act provides for a tax levy within the meaning of
26Article IV of the Constitution and shall go into immediate effect.
27However, the provisions of this act shall become operative on the
28first day of the first calendar quarter commencing more than 90
29days after the effective date of this act.
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