BILL NUMBER: AB 1021	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 26, 2015

INTRODUCED BY   Assembly Member Steinorth

                        FEBRUARY 26, 2015

    An act to amend Section 17010 of the Revenue and Taxation
Code, relating to taxation.   An act to add Section
6012.4 to the Revenue and Taxation Code, relating to taxation, to
take effect imme   diately, tax levy. 


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1021, as amended, Steinorth.  Personal income taxes.
  Sales and use taxes: smartphones: bundled
transactions.  
   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.  
   This 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.  
   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 generally
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 take effect immediately as a tax levy. 

   The 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."  
   This bill would make a nonsubstantive change to those provisions.

   Vote: majority. Appropriation: no. Fiscal committee:  no
  yes  . State-mandated local program: no.


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.  (a) Notwithstanding Sections 6011 and 6012, "gross
receipts" and "sales price" from the retail sale or purchase of a
smartphone shall be limited to the amount charged for the sale of the
smartphone when that smartphone is sold in a bundled transaction.
   (b) "Bundled transaction" means a retail sale of a smartphone that
contractually requires the retailer's customer to activate or
contract with a wireless telecommunications service provider for
utility service for a period greater than one month as a condition of
that sale.
   (c) (1) "Smartphone" means a cellular radio telephone or other
mobile voice communications handset device that includes all of the
following features:
   (A) Utilizes a mobile operating system.
   (B) Possesses the capability to utilize mobile software
applications, access and browse the Internet, utilize text messaging,
utilize digital voice service, and send and receive email.
   (C) Has wireless network connectivity.
   (D) Is capable of operating on a long-term evolution network or
successor wireless data network communication standards.
   (2) A "smartphone" does not include a radio cellular telephone
commonly referred to as a "feature" or "messaging" telephone, a
laptop, a tablet device, or a device that only has electronic reading
capability.
   (d) "Wireless telecommunications service provider" means a utility
regulated by the Public Utilities Commission or Federal
Communication Commission and that offers or provides wireless
communication or paging services. 
   SEC. 2.    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. 3.    This act provides for a tax levy within
the meaning of Article IV of the Constitution and shall go into
immediate effect.  
  SECTION 1.    Section 17010 of the Revenue and
Taxation Code is amended to read:
   17010.  "Taxable year" means either the calendar year or the
fiscal year upon the basis of which the taxable income is computed
under this part. If no fiscal year has been established, "taxable
year" means the calendar year.
   "Taxable year" means, in the case of a return made for a
fractional part of a year under this part or under regulations
prescribed by the Franchise Tax Board, the period for which the
return is made.