BILL NUMBER: SB 688 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 14, 2013
AMENDED IN SENATE APRIL 1, 2013
INTRODUCED BY Senator Galgiani
FEBRUARY 22, 2013
An act to amend Section 6018.1 of, and to add and
repeal Section 6358.3 to, and to repeal Section 6018.1
of, the Revenue and Taxation Code, relating to taxation,
to take effect immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
SB 688, as amended, Galgiani. Sales and use taxes: exemptions:
animals: drug drugs and medicines.
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,
and provides various exemptions from those taxes. Existing sales and
use tax laws, with certain exceptions, define a retailer as a seller
who makes any retail sale of tangible personal property and as a
person who makes more than 2 retail sales of tangible personal
property during any 12-month period, and defines a retail sale as a
sale of tangible personal property for any purpose other than resale
in the regular course of business.
Existing sales and use tax law provides that a licensed
veterinarian is a consumer of, and not a retailer of, drugs and
medicines used or furnished by the veterinarian in the performance of
his or her professional services, so that the retail sale subject to
tax is the sale of drugs and medicine
medicines to the licensed veterinarian.
This bill would repeal , until January 1,
2018, sus pend the provision that a licensed
veterinarian is a consumer of drugs and medicines used or furnished
by the veterinarian in the performance of his or her professional
services.
This bill would , until January 1, 2018,
exempt from sales and use taxes the gross receipts from the sale in
this state of, and the storage, use, or other consumption in this
state of, drugs and medicines used, furnished, or sold by a licensed
veterinarian, a city, county, city and county, or other local
government animal shelter, or a nonprofit animal welfare or rescue
organization for the treatment of animals. This bill would
require the Legislative Analyst's Office to, by January 1, 2017, with
information provided by the State Board of Equalization, conduct and
submit a study to the Senate Committee on Budget and Fiscal Review,
the Assembly Committee on Budget, the Assembly Committee on Revenue
and Taxation, and the Senate Committee on Governance and Finance.
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 1. Section 6018.1 of the Revenue and
Taxation Code is repealed.
SECTION 1. Section 6018.1 of the
Revenue and Taxation Code is amended to read:
6018.1. (a) A licensed veterinarian is a
consumer of, and shall not be considered a retailer within the
provisions of this part with respect to, drugs and medicines used or
furnished by him or her in the performance of his or her professional
services.
For the purposes of this section, "drugs and medicines" includes
substances or preparations intended for use in the diagnosis, cure,
mitigation, treatment, or prevention of disease in animals and which
is commonly recognized as a substance or preparation intended for
this use. The term includes legend drugs, pills and capsules (other
than vitamins), liquid medications, injected drugs, ointments,
vaccines, intravenous fluids, and medicated soaps if those soaps are
available only to veterinarians. The term does not include vitamins,
shampoos, pet foods, prescription diet foods, artificial diets, flea
powders, and flea sprays.
(b) This section shall be inoperative from the period beginning on
the operative date of the act adding this section until January 1,
2018.
SEC. 2. Section 6358.3 is added to the Revenue and Taxation Code,
to read:
6358.3. (a) There are exempted from the taxes imposed by this
part the gross receipts from the sale of, and the storage, use, or
other consumption in this state of, drugs and medicines used,
furnished, or sold by a licensed veterinarian, a city, county, city
and county, or other local government animal shelter, or a nonprofit
animal welfare or rescue organization for the treatment of animals.
(b) For purposes of this section:
(1) "Animal" includes any member of the animal kingdom other than
humans, and includes fowl, fish, and reptiles, whether wild or
domestic.
(2) "Drugs and medicines" includes any substance or preparation
intended for use in the diagnosis, cure, mitigation, treatment, or
prevention of disease in animals and which is commonly recognized as
a substance or preparation intended for this use. The term includes
legend drugs, pills and capsules (other than vitamins), liquid
medications, injected drugs, ointments, vaccines, intravenous fluids,
and medicated soaps if those soaps are available only to
veterinarians. The term does not include vitamins, shampoos, pet
foods, prescription diet foods, artificial diets, flea powders, and
flea sprays.
(3) "Licensed veterinarian" means a person licensed pursuant to
Chapter 11 (commencing with Section 4800) of Division 2 of the
Business and Professions Code.
(4) "Nonprofit animal welfare or rescue organization" means any
organization, formed and operated for the primary purpose of
prevention of abuse, neglect, or exploitation of animals, that is
exempt from tax under Section 23701 as an organization described in
Section 23701d.
(c) (1) The Legislative Analyst's Office shall, by January 1,
2017, with information provided by the board, conduct a study as
described in paragraph (2), and submit the study to the Senate
Committee on Budget and Fiscal Review, the Assembly Committee on
Budget, the Assembly Committee on Revenue and Taxation, and the
Senate Committee on Governance and Finance.
(2) The study shall measure the following:
(A) The effect of the exemption provided by this section on the
number of Internet purchases of veterinary medicine.
(B) The effect of the exemption provided by this section on the
cost of veterinary medicine to consumers.
(C) The effect of the exemption provided by this section on the
number of veterinary visits in the aggregate.
(d) This section shall become inoperative on January 1, 2018, and
as of that date is repealed.
SEC. 3. Notwithstanding Section 2230 of the Revenue and Taxation
Code, no appropriation is made by this act and the state shall not
reimburse any local agency for any sales and use tax revenues lost by
it under this act.
SEC. 4. This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.
However, the provisions of this act shall become operative on the
first day of the first calendar quarter commencing more than 90 days
after the effective date of this act.