SB 732,
as amended, Berryhill. Sales and use taxes: exclusion: trade-inbegin delete motorend deletebegin insert passengerend insert vehicle.
The Sales and Use Tax Law imposes 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 of tangible personal property purchased from a retailer for the storage, use, or other consumption in this state measured by sales price. That law defines the terms “gross receipts” and “sales price.”
This bill would exclude from the terms “gross receipts” and “sales price” the value of abegin delete motorend deletebegin insert passengerend insert vehicle traded in for a newbegin delete motorend deletebegin insert
passengerend insert vehicle, including a newbegin delete motorcycleend deletebegin insert pickup truckend insert, if the value of the trade-inbegin delete motorend deletebegin insert passengerend insert vehicle is separately stated on the new motor vehicle invoice or bill of sale or similar document provided to the purchaser.
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 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 the Sales and Use Tax Law 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 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 6011 of the Revenue and Taxation Code
2 is amended to read:
(a) “Sales price” means the total amount for which
4tangible personal property is sold or leased or rented, as the case
5may be, valued in money, whether paid in money or otherwise,
6without any deduction on account of any of the following:
7(1) The cost of the property sold.
8(2) The cost of materials used, labor or service cost, interest
9charged, losses, or any other expenses.
10(3) The cost of transportation of the property, except as excluded
11by other provisions of this section.
12(b) The total amount for which the property is sold or leased or
13rented includes all of the following:
14(1) Any services that are a part of the sale.
15(2) Any amount for which credit is given to the purchaser by
16the seller.
17(3) The amount of any tax imposed by the United States upon
18producers and importers of gasoline and the amount of any tax
19imposed pursuant to Part 2 (commencing with Section 7301) of
20this division.
21(c) “Sales price” does not include any of the following:
22(1) Cash discounts allowed and taken on sales.
23(2) The
amount charged for property returned by customers
24when that entire amount is refunded either in cash or credit, but
25this exclusion shall not apply in any instance when the customer,
26in order to obtain the refund, is required to purchase other property
P3 1at a price greater than the amount charged for the property that is
2returned. For the purpose of this section, refund or credit of the
3entire amount shall be deemed to be given when the purchase price
4less rehandling and restocking costs are refunded or credited to
5the customer. The amount withheld for rehandling and restocking
6costs may be a percentage of the sales price determined by the
7average cost of rehandling and restocking returned merchandise
8during the previous accounting cycle.
9(3) The amount charged for labor or services rendered in
10installing or applying the property sold.
11(4) (A) The amount of any tax (not including, however, any
12manufacturers’ or importers’ excise tax, except as provided in
13subparagraph (B)) imposed by the United States upon or with
14respect to retail sales whether imposed upon the retailer or the
15consumer.
16(B) The amount of manufacturers’ or importers’ excise tax
17imposed pursuant to Section 4081 or 4091 of the Internal Revenue
18Code for which the purchaser certifies that he or she is entitled to
19either a direct refund or credit against his or her income tax for
20the federal excise tax paid or for which the purchaser issues a
21certificate pursuant to Section 6245.5.
22(5) The amount of any tax imposed by any city, county, city
23and county, or rapid
transit district within the State of California
24upon or with respect to retail sales of tangible personal property,
25measured by a stated percentage of sales price or gross receipts,
26whether imposed upon the retailer or the consumer.
27(6) The amount of any tax imposed by any city, county, city
28and county, or rapid transit district within the State of California
29with respect to the storage, usebegin insert,end insert or other consumption in that city,
30county, city and county, or rapid transit district of tangible personal
31property measured by a stated percentage of sales price or purchase
32price, whether the tax is imposed upon the retailer or the consumer.
33(7) Separately stated charges for transportation from the
34retailer’s
place of business or other point from which shipment is
35made directly to the purchaser, but the exclusion shall not exceed
36a reasonable charge for transportation by facilities of the retailer
37or the cost to the retailer of transportation by other than facilities
38of the retailer. However, if the transportation is by facilities of the
39retailer, or the property is sold for a delivered price, this exclusion
P4 1shall be applicable solely with respect to transportation which
2occurs after the purchase of the property is made.
3(8) Charges for transporting landfill from an excavation site to
4a site specified by the purchaser, either if the charge is separately
5stated and does not exceed a reasonable charge or if the entire
6consideration consists of payment for transportation.
7(9) The amount of
any motor vehicle, mobilehome, or
8commercial coach fee or tax imposed by and paid to the State of
9California that has been added to or is measured by a stated
10percentage of the sales or purchase price of a motor vehicle,
11mobilehome, or commercial coach.
12(10) (A) The amount charged for intangible personal property
13transferred with tangible personal property in any technology
14transfer agreement, if the technology transfer agreement separately
15states a reasonable price for the tangible personal property.
16(B) If the technology transfer agreement does not separately
17state a price for the tangible personal property, and the tangible
18personal property or like tangible personal property has been
19previously sold or leased, or offered for sale or lease, to third
20parties at
a separate price, the price at which the tangible personal
21property was sold, leased, or offered to third parties shall be used
22to establish the retail fair market value of the tangible personal
23property subject to tax. The remaining amount charged under the
24technology transfer agreement is for the intangible personal
25property transferred.
26(C) If the technology transfer agreement does not separately
27state a price for the tangible personal property, and the tangible
28personal property or like tangible personal property has not been
29
previously sold or leased, or offered for sale or lease, to third
30parties at a separate price, the retail fair market value shall be equal
31to 200 percent of the cost of materials and labor used to produce
32the tangible personal property subject to tax. The remaining amount
33charged under the technology transfer agreement is for the
34intangible personal property transferred.
35(D) For purposes of this paragraph, “technology transfer
36agreement” means any agreement under which a person who holds
37a patent or copyright interest assigns or licenses to another person
38the right to make and sell a product or to use a process that is
39subject to the patent or copyright interest.
P5 1(11) The amount of any tax imposed upon diesel fuel pursuant
2to Part 31 (commencing with Section
60001).
3(12) (A) The amount of tax imposed by any Indian tribe within
4the State of California with respect to a retail sale of tangible
5personal property measured by a stated percentage of the sales or
6purchase price, whether the tax is imposed upon the retailer or the
7consumer.
8(B) The exclusion authorized by subparagraph (A) shall only
9apply to those retailers who are in substantial compliance with this
10part.
11(13) The value of a motor vehicle traded in for a new motor
12vehicle, including a new motorcycle, if the value of the trade-in
13motor vehicle is separately stated on the new motor vehicle invoice
14or bill of sale or similar document provided to the purchaser.
15(13) The value of a passenger vehicle traded in for a new
16passenger vehicle, including a new pickup truck, if the value of
17the trade-in passenger vehicle is separately stated on the new
18passenger vehicle invoice or bill of sale or similar document
19provided to the purchaser.
20(A) For purposes of this paragraph:
end insertbegin insert
21(i) “Passenger vehicle” means passenger vehicle as defined by
22Section 34710 of the
Vehicle Code.
23(ii) “Pickup truck” means a pickup truck as defined by Section
24471 of the Vehicle Code.
25(B) Notwithstanding clause (i) of subparagraph (A), “passenger
26vehicle” shall include a passenger vehicle equipped with
27four-wheel drive.
Section 6012 of the Revenue and Taxation Code is
29amended to read:
(a) “Gross receipts” mean the total amount of the sale
31or lease or rental price, as the case may be, of the retail sales of
32retailers, valued in money, whether received in money or otherwise,
33without any deduction on account of any of the following:
34(1) The cost of the property sold. However, in accordance with
35any rules and regulations as the board may prescribe, a deduction
36may be taken if the retailer has purchased property for some other
37purpose than resale, has reimbursed his or her vendor for tax which
38the vendor is required to pay to the state or has paid the use tax
39with respect to the property, and has resold the property prior to
40making any
use of the property other than retention, demonstration,
P6 1or display while holding it for sale in the regular course of business.
2If that deduction is taken by the retailer, no refund or credit will
3be allowed to his or her vendor with respect to the sale of the
4property.
5(2) The cost of the materials used, labor or service cost, interest
6paid, losses, or any other expense.
7(3) The cost of transportation of the property, except as excluded
8by other provisions of this section.
9(4) The amount of any tax imposed by the United States upon
10producers and importers of gasoline and the amount of any tax
11imposed pursuant to Part 2 (commencing with Section 7301) of
12this division.
13(b) The total amount of the sale or lease or rental price includes
14all of the following:
15(1) Any services that are a part of the sale.
16(2) All receipts, cash, creditsbegin insert,end insert and property of any kind.
17(3) Any amount for which credit is allowed by the seller to the
18purchaser.
19(c) “Gross receipts” do not include any of the following:
20(1) Cash discounts allowed and taken on sales.
21(2) Sale price of property returned by customers when that entire
22amount
is refunded either in cash or credit, but this exclusion shall
23not apply in any instance when the customer, in order to obtain
24the refund, is required to purchase other property at a price greater
25than the amount charged for the property that is returned. For the
26purpose of this section, refund or credit of the entire amount shall
27be deemed to be given when the purchase price less rehandling
28and restocking costs are refunded or credited to the customer. The
29amount withheld for rehandling and restocking costs may be a
30percentage of the sales price determined by the average cost of
31rehandling and restocking returned merchandise during the
32previous accounting cycle.
33(3) The price received for labor or services used in installing or
34applying the property sold.
35(4) (A) The amount of any tax (not including, however, any
36manufacturers’ or importers’ excise tax, except as provided in
37subparagraph (B)) imposed by the United States upon or with
38respect to retail sales whether imposed upon the retailer or the
39consumer.
P7 1(B) The amount of manufacturers’ or importers’ excise tax
2imposed pursuant to Section 4081 or 4091 of the Internal Revenue
3Code for which the purchaser certifies that he or she is entitled to
4either a direct refund or credit against his or her income tax for
5the federal excise tax paid or for which the purchaser issues a
6certificate pursuant to Section 6245.5.
7(5) The amount of any tax imposed by any city, county, city
8and county, or rapid transit district within the State of California
9upon or with respect to retail
sales of tangible personal property
10measured by a stated percentage of sales price or gross receipts
11whether imposed upon the retailer or the consumer.
12(6) The amount of any tax imposed by any city, county, city
13and county, or rapid transit district within the State of California
14with respect to the storage, usebegin insert,end insert or other consumption in that city,
15county, city and county, or rapid transit district of tangible personal
16property measured by a stated percentage of sales price or purchase
17price, whether the tax is imposed upon the retailer or the consumer.
18(7) Separately stated charges for transportation from the
19retailer’s place of business or other point from which shipment is
20made
directly to the purchaser, but the exclusion shall not exceed
21a reasonable charge for transportation by facilities of the retailer
22or the cost to the retailer of transportation by other than facilities
23of the retailer. However, if the transportation is by facilities of the
24retailer, or the property is sold for a delivered price, this exclusion
25shall be applicable solely with respect to transportation which
26occurs after the sale of the property is made to the purchaser.
27(8) Charges for transporting landfill from an excavation site to
28a site specified by the purchaser, either if the charge is separately
29stated and does not exceed a reasonable charge or if the entire
30
consideration consists of payment for transportation.
31(9) The amount of any motor vehicle, mobilehome, or
32commercial coach fee or tax imposed by and paid to the State of
33California that has been added to or is measured by a stated
34percentage of the sales or purchase price of a motor vehicle,
35mobilehome, or commercial coach.
36(10) (A) The amount charged for intangible personal property
37transferred with tangible personal property in any technology
38transfer agreement, if the technology transfer agreement separately
39states a reasonable price for the tangible personal property.
P8 1(B) If the technology transfer agreement does not separately
2state a price for the tangible personal property, and the
tangible
3personal property or like tangible personal property has been
4previously sold or leased, or offered for sale or lease, to third
5parties at a separate price, the price at which the tangible personal
6property was sold, leased, or offered to third parties shall be used
7to establish the retail fair market value of the tangible personal
8property subject to tax. The remaining amount charged under the
9technology transfer agreement is for the intangible personal
10property transferred.
11(C) If the technology transfer agreement does not separately
12state a price for the tangible personal property, and the tangible
13personal property or like tangible personal property has not been
14previously sold or leased, or offered for sale or lease, to third
15parties at a separate price, the retail fair market value shall be equal
16to 200 percent of the
cost of materials and labor used to produce
17the tangible personal property subject to tax. The remaining amount
18charged under the technology transfer agreement is for the
19intangible personal property transferred.
20(D) For purposes of this paragraph, “technology transfer
21agreement” means any agreement under which a person who holds
22a patent or copyright interest assigns or licenses to another person
23the right to make and sell a product or to use a process that is
24subject to the patent or copyright interest.
25(11) The amount of any tax imposed upon diesel fuel pursuant
26to Part 31 (commencing with Section 60001).
27(12) (A) The amount of tax imposed by any Indian tribe within
28the State of California with
respect to a retail sale of tangible
29personal property measured by a stated percentage of the sales or
30purchase price, whether the tax is imposed upon the retailer or the
31consumer.
32(B) The exclusion authorized by subparagraph (A) shall only
33apply to those retailers who are in substantial compliance with this
34part.
35(13) The value of a motor vehicle traded in for a new motor
36vehicle, including a new motorcycle, if the value of the trade-in
37motor vehicle is separately stated on the new motor vehicle invoice
38or bill of sale or similar document provided to the purchaser.
39(13) The value of a passenger vehicle traded in for a new
40passenger vehicle, including a new pickup truck, if the value of
P9 1the trade-in passenger vehicle is separately stated on the new
2passenger vehicle invoice or bill of sale or similar document
3provided to the purchaser.
4(A) For purposes of this paragraph:
end insertbegin insert
5(i) “Passenger vehicle” means passenger vehicle as defined by
6Section 34710 of the Vehicle Code.
7(ii) “Pickup truck” means a pickup truck as defined by Section
8471 of the Vehicle Code.
9(B) Notwithstanding clause (i) of subparagraph (A), “passenger
10vehicle” shall include a passenger vehicle equipped with
11four-wheel drive.
12For purposes of the sales tax, if the retailers establish to the
13satisfaction of the board that the sales tax has been added to the
14total amount of the sale price and has not been absorbed by them,
15the total amount of the sale price shall be deemed to be the amount
16received exclusive of the tax imposed. Section 1656.1 of the Civil
17Code shall apply in determining whether or not the retailers have
18absorbed the sales tax.
Notwithstanding Section 2230 of the Revenue and
20Taxation Code, no appropriation is made by this act and the state
21shall not reimburse any local agency for any sales and use tax
22revenues lost by it under this act.
This act provides for a tax levy within the meaning
24of Article IV of the Constitution and shall go into immediate effect.
25However, the provisions of this act shall become operative on the
26first day of the first calendar quarter commencing more than 90
27days after the effective date of this act.
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