BILL NUMBER: SB 983 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 21, 2014
INTRODUCED BY Senator Hernandez
FEBRUARY 11, 2014
An act to amend Section 7205 of the Revenue and Taxation
Code, relating to taxation 53084.5 of the Government
Code, relating to local government .
LEGISLATIVE COUNSEL'S DIGEST
SB 983, as amended, Hernandez. Local sales taxes: card
lock fuel: place of sale. Cities and counties: sales
and use taxes: revenue sharing agreement: card lock system.
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. That law provides that for the
purpose of a local sales tax adopted pursuant to that law, all retail
sales are consummated at the place of business of the retailer
unless otherwise specified.
This bill would instead provide that, in the case of a sale of
fuel for card lock systems, the place at which the retail sale of
card lock fuel is consummated is the point of delivery of fuel to the
vehicle.
Existing law prohibits a local agency, including a city or county,
from entering into any form of agreement with any other person that
would involve the payment, transfer, diversion, or rebate of any
amount of Bradley-Burns local tax proceeds for any purpose if the
agreement results in a reduction in the amount of revenue that is
received by another local agency from a retailer that is located
within the territorial jurisdiction of that other local agency, and
the retailer continues to maintain a physical presence within the
territorial jurisdiction of that other local agency, with specified
exceptions, including an exception for an agreement to pay or rebate
any Bradley-Burns local tax revenue relating to a buying company, as
defined.
This bill would provide that, on or after May 1, 2014, a buying
company does not include a retailer that contracts to sell fuel
through a card lock system.
Vote: majority. Appropriation: no. Fiscal committee: yes
no . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 53084.5 of the
Government Code is amended to read:
53084.5. (a) On or after the date the act adding this section
takes effect, a local agency shall not enter into any form of
agreement that would result, directly or indirectly, in the payment,
transfer, diversion, or rebate of any tax revenue resulting from the
imposition of a sales and use tax under the Bradley-Burns Uniform
Local Sales and Use Tax Law (Part 1.5 (commencing with Section 7200)
of Division 2 of the Revenue and Taxation Code) to any person for any
purpose when both of the following apply:
(1) The agreement results in a reduction in the amount of revenue
that is received by another local agency from a retailer that is
located within the territorial jurisdiction of that other local
agency from the tax proceeds collected under the Bradley-Burns
Uniform Local Sales and Use Tax Law (Part 1.5 (commencing with
Section 7200) of Division 2 of the Revenue and Taxation Code). This
subdivision shall not apply to a reduction in the use tax proceeds
that are distributed to that other local agency through one or more
countywide pools.
(2) The retailer continues to maintain a physical presence within
the territorial jurisdiction of that other local agency. This
subdivision shall not apply if the retailer has expanded its
operations into another jurisdiction with the result that the
retailer is conducting a comparable operation within the jurisdiction
of both local agencies.
(b) For the purposes of this section, the following definitions
have the following meanings:
(1) "Local agency" means a chartered or general law city, a
chartered or general law county, or a city and county.
(2) "Retailer" means a retailer as defined by Section 6015 of the
Revenue and Taxation Code.
(3) "Physical presence" means the lease or ownership of any real
property for the purpose of carrying on business operations.
(c) This section shall not apply to local tax proceeds provided by
a local agency to a retailer if the funds are used to reimburse the
retailer for the construction of public works improvements that serve
all or a portion of the territorial jurisdiction of the local
agency.
(d) (1) This section shall not apply to an
agreement to pay or rebate any tax revenue resulting from the
imposition of a sales and use tax under the Bradley-Burns Uniform
Local Sales and Use Tax Law (Part 1.5 (commencing with Section 7200)
of Division 2 of the Revenue and Taxation Code) relating to a buying
company. "Buying company" means, and is limited to, a legal entity
that is separate from another legal entity that owns, controls, or is
otherwise related to, the buying company and which has been created
for the purpose of performing administrative functions, including
acquiring goods and services for the other entity, as defined by the
State Board of Equalization, and meets requirements of a buying
company under Sections 6066 to 6075, inclusive, of the Revenue and
Taxation Code, and the regulations adopted pursuant to those
sections.
(2) (A) Notwithstanding paragraph (1), on or after May 1, 2014, a
buying company does not include a retailer that contracts to sell
fuel through a card lock system.
(B) "Card lock system" means a system in which owners of
unattended card lock fueling stations form a network whereby
customers may purchase fuel at any of the network's participating
fueling stations by use of a card issued to the customer, and where
prices are not posted at the pump and no receipt is given at the time
of delivery.
(C) This paragraph does not apply to an agreement entered into
before May 1, 2014, to pay or rebate any tax revenue resulting from
the imposition of a sales and use tax under the Bradley-Burns Uniform
Local Sales and Use Tax Law (Part 1.5 (commencing with Section 7200)
of Division 2 of the Revenue and Taxation Code) relating to a buying
company that is a retailer that contracts to sell fuel through a
card lock system.
(e) This section shall not apply to any agreement by a local
agency to pay or rebate any use tax revenue resulting from the
imposition of a sales and use tax under the Bradley-Burns Uniform
Local Sales and Use Tax Law (Part 1.5 (commencing with Section 7200)
of Division 2 of the Revenue and Taxation Code) relating to a use tax
direct payment permit issued under Section 7051.3 of the Revenue and
Taxation Code.
(f) Nothing in this section shall be interpreted to limit the
ability of a local agency to contract with or otherwise enter into an
agreement pursuant to subdivision (b) of Section 7056 of the Revenue
and Taxation Code.
SECTION 1. Section 7205 of the Revenue and
Taxation Code is amended to read:
7205. (a) For the purpose of a sales tax imposed by an ordinance
adopted pursuant to this part, all retail sales are consummated at
the place of business of the retailer unless the tangible personal
property sold is delivered by the retailer or his or her agent to an
out-of-state destination or to a common carrier for delivery to an
out-of-state destination. The gross receipts from those sales shall
include delivery charges, when those charges are subject to the state
sales and use tax, regardless of the place to which delivery is
made.
(b) (1) In the event a retailer has no permanent place of business
in the state or has more than one place of business, the place or
places at which the retail sales are consummated for the purpose of a
sales tax imposed by an ordinance adopted pursuant to this part
shall, subject to paragraph (2), be determined under rules and
regulations to be prescribed and adopted by the board.
(2) In the case of a sale of jet fuel, the place at which the
retail sale of that jet fuel is consummated for the purpose of a
sales tax imposed by an ordinance adopted pursuant to this part is
the point of the delivery of that jet fuel to the aircraft.
(3) (A) In the case of a sale of fuel for card lock systems, the
place at which the retail sale of card lock fuel is consummated for
the purpose of a sales tax imposed by an ordinance adopted pursuant
to this part is the point of delivery of fuel to the vehicle.
(B) "Card lock system" means a system where owners of unattended
card lock fueling stations form a network whereby customers may
purchase fuel at any of the network's participating fueling stations
by use of a card issued to the customer, and where prices are not
posted at the pump and no receipt is given at the time of delivery.