Amended in Assembly September 9, 2015

California Legislature—2015–16 Second Extraordinary Session

Assembly Bill No. 18

Introduced by Assembly Member Bonilla

(Principal coauthor: Assembly Member Thurmond)

(Coauthors: Assembly Members Eggman, Frazier, begin insert Cristina Garcia, end insert Mark Stone, and Wood)

August 31, 2015

An act to add Section 6012.4 to, and to add Part 14.5 (commencing with Section 33001) to Division 2 of, the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.

LEGISLATIVE COUNSEL’S DIGEST

AB 18, as amended, Bonilla. Taxation: distilled spirits: Cocktails for Healthy Outcomes Act.

(1) The Fee Collection Procedures Law, the violation of which is a crime, provides procedures for the collection of certain fees and surcharges.

This bill, on and after January 1, begin delete 2016, end delete begin insert 2017, end insert would impose a surtax on every individual for each purchase of a cocktail from an on-sale licensee for consumption or other use on the licensed, in-state premises of that on-sale licensee at the rate of $0.05 per cocktail, as defined. This bill would require the surtax rate to be adjusted annually, as specified. This bill would require an on-sale licensee to separately state and collect the surtax from an individual, as specified.

This bill would require the State Board of Equalization to administer and collect the surtax in accordance with the Fee Collection Procedures Law. By expanding the application of the Fee Collection Procedures Law, the violation of which is a crime, this bill would impose a state-mandated local program. The bill would require an on-sale licensee to register with the board, to prepare and file with the board returns using electronic media in the form prescribed by the board, containing specified information, and to remit the fee quarterly. The bill would require that all revenues, less refunds, be remitted to the begin delete State Board of Equalization end delete begin insert board end insert and deposited in the Healthy California Special Fund for the funding of, among other things, developmental disability services, upon appropriation by the Legislature.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

(2) 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 “gross receipts” subject to tax the amount of surtax imposed by this bill.

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 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.

This bill would take effect immediately as a tax levy.

Vote: ²⁄₃. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

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

SECTION 1.  

Section 6012.4 is added to the Revenue and
Taxation Code, to read:

6012.4.  

Notwithstanding Section 6012, “gross receipts” shall
not include the surtax imposed pursuant to Part 14.5 (commencing
with Section 33001).

SEC. 2.  

Part 14.5 (commencing with Section 33001) is added
to Division 2 of the Revenue and Taxation Code, to read:

 

PART 14.5.  Cocktails for Healthy Outcomes Act

 

33001.  

This part is known, and may be cited, as the “Cocktails
for Healthy Outcomes Act.”

33002.  

(a) On and after January 1, begin delete 2016, end delete begin insert 2017, end insert there is hereby
imposed a surtax on every individual for each purchase of a cocktail
from an on-sale licensee for consumption or other use on the
licensed, in-state premises of that on-sale licensee at the rate of
five cents ($0.05) per cocktail.

(b) For each calendar year beginning on and after January 1,
begin delete 2017, the State Board of Equalization end delete begin insert 2018, the board end insert shall
recompute the rate in subdivision (a) in accordance with the
percentage change in the California Consumer Price Index, and
that recomputed rate shall apply for that calendar year, except that
the begin delete recomputed end delete rate shall not be less than five cents ($0.05). The
board shall recompute before January 1, begin delete 2017, end delete begin insert 2018, end insert and before
each January 1 thereafter.

33003.  

(a) Every on-sale licensee making sales of cocktails
for consumption or other use on the licensed, in-state premises of
the licensee shall, at the time of making such a sale to an individual,
collect the surtax as a charge separate from, and not included in,
any other fee, charge, or other amount paid by the purchaser.

(b) The on-sale licensee shall collect the surtax from the
individual purchasing cocktails on the licensee’s premises and
give to the purchaser a receipt therefore in the manner and form
prescribed by the board.

(c) The board shall administer and collect the surtax imposed
by this part pursuant to the Fee Collection Procedures Law (Part
30 (commencing with Section 55001)).

(d) (1) The surtax is required to be collected by an on-sale
licensee and any amount unreturned to the purchaser who paid an
amount in excess of the surtax, but was collected from the
purchaser under the representation by the licensee that it was owed
as a surtax, constitutes debts owed by the licensee to this state.

(2) An individual is liable for the surtax until it has been paid
to the state, except that payment to the on-sale licensee relieves
the purchaser from further liability for the surtax. Any surtax
collected from a purchaser that has not been remitted to the board
shall be a debt owed to the state by the licensee required to collect
and remit the surtax.

(e) The board may prescribe, adopt, and enforce regulations
relating to the administration and enforcement of this part,
including, but not limited to, collections, reporting, refunds, and
appeals.

(f) (1) The surtax imposed by this part is due and payable to
the board quarterly on or before the last day of the month next
succeeding each quarterly period.

(2) On or before the last day of the month following each
quarterly period, a return for the preceding quarterly period shall
be filed with the board using electronic media, in the form
prescribed by the board. Returns shall be authenticated in a form
or pursuant to methods, as prescribed by the board.

33004.  

(a) An on-sale licensee required to collect the surtax
imposed under this part shall register with the board. Every
application for registration shall be made in a form prescribed by
the board and shall set forth the name under which the applicant
transacts or intends to transact business, the location of the
licensee’s place or places of business, and any other information
that the begin delete State Board of Equalization end delete begin insert board end insert may require. An
application for registration shall be authenticated in a form or
pursuant to methods as may be prescribed by the begin delete State Board of
Equalization. end delete begin insert board. end insert

(b) An application for registration filed pursuant to this section
may be filed using electronic media as prescribed by the begin delete State
Board of Equalization. end delete begin insert board. end insert Electronic media includes, but is
not limited to, computer modem, magnetic media, optical disc,
facsimile machine, or telephone.

33005.  

The taxes imposed by this part are in addition to any
other tax imposed under the Alcoholic Beverage Tax Law (Part
14 (commencing with Section 32001)), the Sales and Use Tax Law
(Part 1 (Commencing with Section 6001)), or the Bradley-Burns
Uniform Sales and Use Tax law (Part 1.5 (commencing with
Section 7200)), or in accordance with the Transactions and Use
Tax Law (Part 1.6 (commencing with Section 7251)).

33006.  

For purposes of this part, the following definitions shall
apply:

(a) “Board” means the State Board of Equalization.

(b) “Cocktail” means any beverage that is, or contains, distilled
spirits.

(c) “Distilled spirits” has the same meaning as that term is
defined by Section 23005 of the Business and Professions Code,
as in effect January 1, 2016.

(d) (1) “On-sale licensee” means an on-sale licensee under the
Alcoholic Beverage Control Act (Division 9 (commencing with
Section 23000) of the Business and Professions Code) that
exercises the privileges described in Section 23396 of the Business
and Professions Code, as in effect January 1, 2016.

(2) “On-sale licensee” does not include a licensee with any of
the following:

(A) An On-sale General for Train license.

(B) An On-sale General for Boat license.

(C) An On-sale General for Airplane license.

(D) A Daily On-sale General license.

(E) A Veterans’ Club license.

33007.  

The Healthy California Special Fund is hereby
established in the State Treasury. All revenues, less refunds,
collected pursuant to this part shall be made in remittances to the
begin delete State Board of Equalization end delete begin insert board end insert and shall be deposited in the
Healthy California Special Fund. Upon appropriation by the
Legislature, all moneys in the fund shall be expended for the
following purposes:

(a) Developmental disability services, among other health
programs.

(b) Reimbursement to the begin delete State Board of Equalization end delete begin insert board end insert
for expenses incurred in the implementation, administration, and
collection of the taxes imposed by this chapter.

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.  

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.

SEC. 5.  

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