BILL NUMBER: AB 755 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 14, 2015
INTRODUCED BY Assembly Member Ridley-Thomas
FEBRUARY 25, 2015
An act to add Section 17204.6 6362
to the Revenue and Taxation Code, relating to taxation, to take
effect immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
AB 755, as amended, Ridley-Thomas. Personal income taxes:
deduction: student loan interest. Sales and use
taxes: exemption: small businesses: Los Angeles County transit
projects.
Existing sales and use tax laws impose taxes 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 the taxes imposed by those
laws.
This bill would partially exempt from those taxes the gross
receipts from the sale of, and the storage, use, or other consumption
of, tangible personal property sold by, or purchased from, a
retailer that is a small business, as defined, and whose property
line abuts or faces the rail corridor or a designated construction
staging or construction storage area of the Crenshaw/LAX Transit
Corridor Light Rail Line, the Regional Connector Transit Corridor
Light Rail Line, or the Westside Subway Extension Light Rail Line, as
specified. The bill would also make findings and declarations in
this regard.
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
generally to the Sales and Use Tax Law. Exemptions from state sales
and use taxes are incorporated into these laws.
This bill would specify that this exemption does not apply to
local sales and use taxes and transactions and use taxes.
The Personal Income Tax Law, in conformity with federal income tax
laws, allows a deduction from gross income for the taxable year in
an amount equal to the interest paid by the taxpayer, not to exceed
$2,500, during the taxable year on a qualified education loan. That
law provides for a phase out at certain modified adjusted gross
income levels.
This bill, for taxable years beginning on or after January 1,
2016, would increase the dollar amount limit to $4,000, thereby no
longer conforming to that limitation of the federal income tax law.
This bill would take effect immediately as a tax levy.
However, the provisions of this act shall become operative on
January 1, 2016.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all
of the following:
(a) The Los Angeles County Metropolitan Transportation Authority
is currently engaged in the largest public transit expansion in the
country.
(b) This expansion will fundamentally transform the County of Los
Angeles and will have significant long-term economic benefits.
(c) The Los Angeles County Metropolitan Transportation Authority
is currently constructing three future rail transit lines known as
the Crenshaw/LAX Transit Corridor Light Rail Line, the Regional
Connector, and the Westside Subway Extension.
(d) The Los Angeles County Metropolitan Transportation Authority
has adopted a Locally Preferred Alternative for these projects, which
describe the route alignment of the projects, including station
locations.
(e) While these projects will create long-term economic benefits
for the local communities and the County of Los Angeles as a whole,
there will be temporary impacts to the local communities from the
construction of these projects.
(f) It is incumbent upon the state to partner with the Los Angeles
County Metropolitan Transportation Authority and assist it in
mitigating these short term impacts by providing tax relief to small
businesses affected by the construction of these light rail lines.
SEC. 2. Section 6362 is added to the
Revenue and Taxation Code , to read:
6362. (a) During the period in which each project is under
construction, 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, tangible personal property sold by, or
purchased from, a retailer that is a small business and whose
property line abuts or faces the rail corridor or a designated
construction staging or construction storage area, including a small
business located in a mall or strip-mall that is similarly situated,
of the Crenshaw/LAX Transit Corridor Light Rail Line, the Regional
Connector Transit Corridor Light Rail Line, or the Westside Subway
Extension Light Rail Line selected as the Locally Preferred
Alternative, as described in the Final Environmental Impact
Statement/Environmental Impact Report for each project, and as
approved by the Los Angeles County Metropolitan Transportation
Authority.
(b) For the purposes of this section, the following shall apply:
(1) "Project" means the Crenshaw/LAX Transit Corridor Light Rail
Line, the Regional Connector Transit Corridor Light Rail Line, and
the Westside Subway Extension Light Rail Line as described in this
section.
(2) "Small business" shall mean a retailer that remitted to the
board less than two hundred thousand dollars ($200,000) in tax for
the previous four calendar quarters.
(3) "Small business" also means a retailer that has been in
operation for less than four calendar quarters and remitted less than
an average of fifty thousand dollars ($50,000) in tax for each
calendar quarter of operation.
(c) (1) Notwithstanding any provision of the Bradley-Burns Uniform
Local Sales and Use Tax Law (Part 1.5 (commencing with Section
7200)) or the Transactions and Use Tax Law (Part 1.6 (commencing with
Section 7251)), the exemption established by this section does not
apply with respect to any tax levied by a county, city, or district
pursuant to, or in accordance with, either of those laws.
(2) Notwithstanding subdivision (a), the exemption established by
this section shall not apply with respect to any tax levied pursuant
to Section 6051.2, 6051.5, 6201.2, or 6201.5, pursuant to Section 35
and Subdivision (f) of Section 36 of Article XIII of the California
Constitution, or any tax levied pursuant to Section 6051 or 6201 that
is deposited in the State Treasury to the credit of the Local
Revenue Fund 2011 pursuant to Section 6051.15 or 6201.15.
SEC. 3. 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 January 1, 2016.
SECTION 1. Section 17204.6 is added to the
Revenue and Taxation Code, to read:
17204.6. For taxable years beginning on or after January 1, 2016,
Section 221(b)(1) of the Internal Revenue Code is modified by
substituting the number "$4,000" for the number "$2,500" therein.
SEC. 2. This act provides for a tax levy within
the meaning of Article IV of the Constitution and shall go into
immediate effect.