SB 373, as introduced, Huff. Sales and use taxes: gross receipts: definition.
The Sales and Use Tax Law imposes a sales tax on retailers measured by the gross receipts from the sale of tangible personal property sold at retail in this state, or a use tax, measured by the sales price, 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. That law defines the term “gross receipts.”
This bill would make a technical, nonsubstantive change to the definition of the term “gross receipts.”
Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 6012 of the Revenue and Taxation Code
2 is amended to read:
(a) “Gross receipts” mean the total amount of the sale
4or lease or rental price, asbegin delete the case may beend deletebegin insert applicableend insert, of the retail
5sales of retailers, valued in money, whether received in money or
6otherwise, without any deduction on account of any of the
7following:
P2 1(1) The cost of the property sold. However, in accordance with
2any rules and regulations as the board may prescribe, a deduction
3may be taken if the retailer has purchased property for some other
4purpose than resale, has reimbursed his or her vendor for tax which
5the vendor is
required to pay to the state or has paid the use tax
6with respect to the property, and has resold the property prior to
7making any use of the property other than retention, demonstration,
8or display while holding it for sale in the regular course of business.
9If that deduction is taken by the retailer, no refund or credit will
10be allowed to his or her vendor with respect to the sale of the
11property.
12(2) The cost of the materials used, labor or service cost, interest
13paid, losses, or any other expense.
14(3) The cost of transportation of the property, except as excluded
15by other provisions of this section.
16(4) The amount of any tax imposed by the United States upon
17producers and importers of gasoline and the amount of any tax
18imposed pursuant to Part 2 (commencing with Section 7301) of
19this division.
20(b) The total amount of the sale or lease or rental price includes
21all of the following:
22(1) Any services that are a part of the sale.
23(2) All receipts, cash, credits and property of any kind.
24(3) Any amount for which credit is allowed by the seller to the
25purchaser.
26(c) “Gross receipts” do not include any of the following:
27(1) Cash discounts allowed and taken on sales.
28(2) Sale price of property returned by customers when that entire
29amount is refunded either in cash or credit, but this exclusion shall
30not apply in any instance when the customer, in order to
obtain
31the refund, is required to purchase other property at a price greater
32than the amount charged for the property that is returned. For the
33purpose of this section, refund or credit of the entire amount shall
34be deemed to be given when the purchase price less rehandling
35and restocking costs are refunded or credited to the customer. The
36amount withheld for rehandling and restocking costs may be a
37percentage of the sales price determined by the average cost of
38rehandling and restocking returned merchandise during the
39previous accounting cycle.
P3 1(3) The price received for labor or services used in installing or
2applying the property sold.
3(4) (A) The amount of any tax (not including, however, any
4manufacturers’ or importers’ excise tax, except as provided in
5subparagraph (B)) imposed by the United States upon or with
6respect to retail sales whether imposed
upon the retailer or the
7consumer.
8(B) The amount of manufacturers’ or importers’ excise tax
9imposed pursuant to Section 4081 or 4091 of the Internal Revenue
10Code for which the purchaser certifies that he or she is entitled to
11either a direct refund or credit against his or her income tax for
12the federal excise tax paid or for which the purchaser issues a
13certificate pursuant to Section 6245.5.
14(5) The amount of any tax imposed by any city, county, city
15and county, or rapid transit district within the State of California
16upon or with respect to retail sales of tangible personal property
17measured by a stated percentage of sales price or gross receipts
18whether imposed upon the retailer or the consumer.
19(6) The amount of any tax imposed by any city, county, city
20and county, or rapid transit district within the State of
California
21with respect to the storage, use or other consumption in that city,
22county, city and county, or rapid transit district of tangible personal
23property measured by a stated percentage of sales price or purchase
24price, whether the tax is imposed upon the retailer or the consumer.
25(7) Separately stated charges for transportation from the
26retailer’s place of business or other point from which shipment is
27made directly to the purchaser, but the exclusion shall not exceed
28a reasonable charge for transportation by facilities of the retailer
29or the cost to the retailer of transportation by other than facilities
30of the retailer. However, if the transportation is by facilities of the
31retailer, or the property is sold for a delivered price, this exclusion
32shall be applicable solely with respect to transportation which
33occurs after the sale of the property is made to the purchaser.
34(8) Charges for transporting landfill from an excavation site to
35a site specified by the purchaser, either if the charge is separately
36stated and does not exceed a reasonable charge or if the entire
37consideration consists of payment for transportation.
38(9) The amount of any motor vehicle, mobilehome, or
39commercial coach fee or tax imposed by and paid to the State of
40California that has been added to or is measured by a stated
P4 1percentage of the sales or purchase price of a motor vehicle,
2mobilehome, or commercial coach.
3(10) (A) The amount charged for intangible personal property
4transferred with tangible personal property in any technology
5transfer agreement, if the technology transfer agreement separately
6states a reasonable price for the tangible personal property.
7(B) If the
technology transfer agreement does not separately
8state a price for the tangible personal property, and the tangible
9personal property or like tangible personal property has been
10previously sold or leased, or offered for sale or lease, to third
11parties at a separate price, the price at which the tangible personal
12property was sold, leased, or offered to third parties shall be used
13to establish the retail fair market value of the tangible personal
14property subject to tax. The remaining amount charged under the
15technology transfer agreement is for the intangible personal
16property transferred.
17(C) If the technology transfer agreement does not separately
18state a price for the tangible personal property, and the tangible
19personal property or like tangible personal property has not been
20previously sold or leased, or offered for sale or lease, to third
21parties at a separate price, the retail fair market value shall be equal
22to 200 percent of the cost
of materials and labor used to produce
23the tangible personal property subject to tax. The remaining amount
24charged under the technology transfer agreement is for the
25intangible personal property transferred.
26(D) For purposes of this paragraph, “technology transfer
27agreement” means any agreement under which a person who holds
28a patent or copyright interest assigns or licenses to another person
29the right to make and sell a product or to use a process that is
30subject to the patent or copyright interest.
31(11) The amount of any tax imposed upon diesel fuel pursuant
32to Part 31 (commencing with Section 60001).
33(12) (A) The amount of tax imposed by any Indian tribe within
34the State of California with respect to a retail sale of tangible
35personal property measured by a stated percentage of the sales or
36
purchase price, whether the tax is imposed upon the retailer or the
37consumer.
38(B) The exclusion authorized by subparagraph (A) shall only
39apply to those retailers who are in substantial compliance with this
40part.
P5 1For purposes of the sales tax, if the retailers establish to the
2satisfaction of the board that the sales tax has been added to the
3total amount of the sale price and has not been absorbed by them,
4the total amount of the sale price shall be deemed to be the amount
5received exclusive of the tax imposed. Section 1656.1 of the Civil
6Code shall apply in determining whether or not the retailers have
7absorbed the sales tax.
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