AB 1021,
as amended, Steinorth. begin deletePersonal income taxes. end deletebegin insertSales and use taxes: smartphones: bundled transactions.end insert
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 in this state of tangible personal property purchased from a retailer for storage, use, or other consumption in this state. Under existing sales and use tax regulations, gross receipts from a retail sale of a smartphone sold in a bundled transaction with wireless telecommunication service is generally equal to the amount of the unbundled sales price of the smartphone.
end insertbegin insertThis bill would, instead, limit the gross receipts from a retail sale of a smartphone sold in a bundled transaction with wireless telecommunication service to the bundled sales price of the smartphone.
end insertbegin insertThe 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 generally conforms to the Sales and Use Tax Law. Amendments to state sales and use taxes are incorporated into these laws.
end insertbegin insertSection 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.
end insertbegin insertThis 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.
end insertbegin insertThis bill would take effect immediately as a tax levy.
end insertThe Personal Income Tax Law imposes taxes on income and provides definitions of specified terms for purposes of that law, including a definition for “taxable year.”
end deleteThis bill would make a nonsubstantive change to those provisions.
end deleteVote: majority.
Appropriation: no.
Fiscal committee: begin deleteno end deletebegin insertyesend insert.
State-mandated local program: no.
The people of the State of California do enact as follows:
begin insertSection 6012.4 is added to the end insertbegin insertRevenue and
2Taxation Codeend insertbegin insert, to read:end insert
(a) Notwithstanding Sections 6011 and 6012, “gross
4receipts” and “sales price” from the retail sale or purchase of a
5smartphone shall be limited to the amount charged for the sale of
6the smartphone when that smartphone is sold in a bundled
7transaction.
8(b) “Bundled transaction” means a retail sale of a smartphone
9that contractually requires the retailer’s customer to activate or
10contract with a wireless telecommunications service provider for
11utility service for a period greater than one month as a condition
12of that sale.
13(c) (1) “Smartphone” means a cellular radio telephone or other
14mobile voice communications handset device that includes all of
15the following features:
16(A) Utilizes a mobile operating system.
17(B) Possesses the capability to utilize mobile software
18applications, access and browse the Internet, utilize text messaging,
19utilize digital voice service, and send and receive email.
20(C) Has wireless network connectivity.
P3 1(D) Is capable of operating on a long-term evolution network
2or successor wireless data network communication standards.
3(2) A “smartphone” does not include a radio cellular telephone
4commonly referred to as a “feature” or “messaging” telephone,
5a laptop, a tablet device, or a device that only has electronic
6reading capability.
7(d) “Wireless telecommunications service provider” means a
8utility regulated by the Public Utilities Commission or Federal
9Communication Commission and that offers or provides wireless
10communication or paging services.
Notwithstanding Section 2230 of the Revenue and
12Taxation Code, no appropriation is made by this act and the state
13shall not reimburse any local agency for any sales and use tax
14revenues lost by it under this act.
This act provides for a tax levy within the meaning of
16Article IV of the Constitution and shall go into immediate effect.
Section 17010 of the Revenue and Taxation Code
18 is amended to read:
“Taxable year” means either the calendar year or the
20fiscal year upon the basis of which the taxable income is computed
21under this part. If no fiscal year has been established, “taxable
22year” means the calendar year.
23“Taxable year” means, in the case of a return made for a
24fractional part of a year under this part or under regulations
25prescribed by the Franchise Tax Board, the period for which the
26return is made.
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