Amended in Senate April 11, 2013

Senate Bill No. 808

Introduced by Senator De León

February 22, 2013

An act to amend Section begin delete 18872 of end delete begin insert 6357.5 of, and to add Section 6357.6 to, end insert the Revenue and Taxation Code, begin insert to amend Section 322 of, and to add Section 337 to, the Unemployment Insurance Code, end insert relating to taxation begin insert , to take effect immediately, tax levy end insert .

LEGISLATIVE COUNSEL’S DIGEST

SB 808, as amended, De León. begin delete Personal income taxes: voluntary contributions. end delete begin insert Sales and use taxes: air common carrier: employing Medi-Cal recipients. end insert

begin insert

The Sales and Use Tax Law imposes a tax on the gross receipts from the sale in this state of, or the storage, use, or other consumption in this state of, tangible personal property. That law provides various exemptions from that tax, including an exemption for the gross receipts from the sale of, and the storage, use, or other consumption of, fuel and petroleum products sold to an air common carrier for immediate consumption or shipment use in the conduct of its business as an air common carrier on an international flight.

end insert begin insert

This bill would prohibit the exemption for the sole of fuel and petroleum products to an air common carrier during a calendar year following a year in which the air common carrier fails to send specified information to the Employment Development Department, or a year in which the State Board of Equalization provides notification that the air common carrier employs people enrolled in Medi-Cal or a contractor or subcontractor of the air common carrier employs people enrolled in Medi-Cal, as specified. This bill would subject the carrier to liability for payment of sales tax as if it were a retailer making a retail sale of the tangible personal property at the time of the purchase, as prescribed. This bill would require the Employment Development Department, in coordination and consultation with the State Department of Health Care Services, to collect and identify specified information relating to the air common carriers, and would require the Employment Development Department and the State Board of Equalization to provide specified notifications related to air common carriers and the status of the exemption, as prescribed.

end insert begin insert

This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of 2⁄3 of the membership of each house of the Legislature.

end insert begin insert

This bill would take effect immediately as a tax levy.

end insert begin delete

Existing law states that it is the intent of the Legislature to encourage persons who prepare tax returns, as specified, to inform their clients, in writing, that they may make a voluntary contribution to specified funds or programs as provided on the state income tax return.

end delete begin delete

This bill would make a technical, nonsubstantive change to this provision.

end delete

Vote:  begin delete majority end delete begin insert ²⁄₃ end insert . Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 6357.5 of the end insert begin insert Revenue and Taxation Code end insert
begin insert is amended to read: end insert

6357.5.  

(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 of, fuel and petroleum products sold to an
air common carrier for immediate consumption or shipment in the
conduct of its business as an air common carrier, on an international
flight.

(b) To qualify for the exemption, the air common carrier shall
furnish to the seller an exemption certificate in writing stating the
quantity of fuel and petroleum products claimed as exempt. That
certificate shall bear the purchaser’s valid seller’s permit number
or valid fuel exemption registration number and shall be
substantially in the form prescribed by the board. Acceptance in
good faith of that certificate shall relieve the seller from liability
for the sales tax.

(c) “Immediate consumption or shipment,” as used in this
section, means that the delivery of the fuel and petroleum products
by the seller is directly into an aircraft for consumption or
transportation on an international flight and not for storage by the
purchaser or any third party.

(d) “International flight,” as used in this section, is a flight whose
final destination is a point outside of the United States.

(e) Any air common carrier claiming exemption under this
section who is not required to hold a valid seller’s permit, shall be
required to register with the board and obtain a fuel exemption
registration number, and shall be required to file returns as the
board may prescribe, either if the board notifies the carrier that
returns must be filed or if the carrier is liable for taxes based upon
consumption or transportation of fuel or petroleum products
erroneously claimed as exempt under this section. A common
carrier required to hold a fuel exemption registration number shall
be subject to all applicable provisions of this part, Part 1.5
(commencing with Section 7200), and Part 1.6 (commencing with
Section 7251).

(f) An air common carrier claiming an exemption under this
section upon request, shall make available to the board records,
including, but not limited to, a copy of a log abstract, an air waybill,
or a cargo manifest, documenting its consumption or transportation
of the fuel or petroleum products on an international flight and the
amount claimed as exempt. If the carrier fails to provide these
records upon request, the board may revoke the carrier’s fuel
exemption registration number.

(g) The board may require any air common carrier claiming an
exemption under this section and required to obtain a fuel
exemption registration number, to place with it such security as
the board may determine pursuant to Section 6701.

(h) Pursuant to this section, any use of the fuel and petroleum
products by the purchasing carrier, other than that incident to the
delivery of the fuel and petroleum products to the carrier and the
consumption or transportation of the fuel and petroleum products
by the carrier on an international flight for use in the conduct of
its business as a common carrier, or a failure of the carrier to
document its consumption or transportation of the fuel and
petroleum products on an international flight, shall subject the
carrier to liability for payment of sales tax as if it were a retailer
making a retail sale of the property at the time of that use or failure,
and the sales price of the property to it shall be deemed to be the
gross receipts from the retail sale.

(i) In the event that the federal exemption provided in Section
1309 of Title 19 of the United States Code, relating to supplies for
certain vessels and aircraft, is repealed, this section is repealed as
of that date.

begin insert

(j) The exemption provided by this section shall not apply if the
fuel and petroleum products are sold to an air common carrier
during a calendar year following a year in which the air common
carrier fails to send the information required under subdivision
(a) of Section 6357.6 to the Employment Development Department
or a year in which the board provided notification pursuant to
paragraph (1) of subdivision (c) of Section 6357.6. Any exemption
claimed for that purchase shall subject the carrier to liability for
payment of sales tax as if it were a retailer making a retail sale of
the tangible personal property at the time of the purchase, and the
sales price of the property to it shall be deemed to be the gross
receipts from the retail sale.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 6357.6 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

begin insert

begin insert 6357.6. end insert   

(a) On or before June 30, 2014, and on or before every
June 30 thereafter, an air common carrier that furnishes or intends
to furnish an exemption certificate under Section 6357.5 for fuel
purchased during the next calendar year shall send the following
information to the Employment Development Department:

(1) A list of the names, addresses, and telephone numbers of
persons with which the air common carrier has entered into a
contract or agreement for labor or services in the state.

(2) A list of the names, addresses, and telephone numbers of
persons with which the persons listed in paragraph (1) have
entered into a contract or agreement for labor or services
performed in the state for or on behalf of the air common carrier,
regardless of whether the person has a direct contractual
relationship with the air common carrier.

(b) On or before November 1, 2014, and on or before every
November 1 thereafter, the Employment Development Department
shall send a notification to the board of an air common carrier,
or person listed in paragraph (1) or (2), that employs a person
enrolled in the Medi-Cal program.

(c) (1) Upon receipt of the notification in subdivision (b), the
board shall, on or before December 1, 2014, and on or before
every December 1 thereafter, provide notification to an air common
carrier to inform the carrier that the exemption under Section
6357.5 shall not apply to a purchase of fuel and petroleum products
during the following calendar year, and any subsequent calendar
year, unless a subsequent notification described in paragraph (2)
is provided.

(2) If the Employment Development Department sends a
notification pursuant to subdivision (b) to the board that does not
contain an air common carrier to which the board provided
notification in paragraph (1), the board shall, on or before
December 1 of the calendar year in which the air common carrier
was not allowed the exemption, send a subsequent notification to
the air common carrier informing that carrier that the exemption
under Section 6357.5 shall apply during the following calendar
year.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 322 of the end insert begin insert Unemployment Insurance Code end insert begin insert is
amended to read: end insert

322.  

The department may exchange information with other
governmental departments and agencies, both federal and state,
which are concerned with the administration of unemployment
insurance, or the collection of taxes which may be used to finance
the administration of unemployment insurance, or the relief of
unemployed or destitute individuals, or legislation concerning,
regulating, or in any manner affecting the obligations arising out
of an employer-employee relation, begin insert with the board and the State
Department of Health Care Services for the administration of
Section 6357.6 of the Revenue and Taxation Code, end insert and with other
departments or agencies of government as the department deems
necessary or desirable for the proper administration of this division
in accordance with authorized regulations.

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 337 is added to the end insert begin insert Unemployment Insurance
Code end insert begin insert , to read: end insert

begin insert

begin insert 337. end insert   

The department, in consultation and coordination with
the State Department of Health Care Services, shall do all the
following:

(a) Collect the names of air common carriers and persons
described under paragraph (1) or (2) of subdivision (a) of Section
6357.6 of the Revenue and Taxation Code.

(b) Identify the names of any air common carrier that employs
a person enrolled in the Medi-Cal program, or the name of any
air common carrier that contracts or subcontracts with a person
for labor or services for or on behalf of the air common carrier
in the state that employs a person enrolled in the Medi-Cal
program.

end insert

begin insert

begin insert SEC. 5. end insert   

end insert begin insert

This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.

end insert

begin delete

SECTION 1.  

Section 18872 of the Revenue and Taxation Code
is amended to read:

18872.  

The Legislature finds and declares that it is important
to inform taxpayers of their ability to make voluntary contributions
to certain funds or programs, as provided on the state income tax
return. The Legislature further finds and declares that many
taxpayers remain unaware of the voluntary contribution check-offs
on the state income tax return. Therefore, it is the intent of the
Legislature to encourage all persons who prepare state income tax
returns to inform their clients in writing, prior to the completion
of any tax return, that they may make a contribution to any
voluntary contribution check-off on the state income tax return if
they so choose.

end delete