Amended in Assembly April 20, 2016

Amended in Assembly March 28, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 2321

Introduced by Assembly Member Rodriguez

February 18, 2016

An act to amend Sections 6292, 6293, and 6294 of the Revenue and Taxation Code, and to amend Sections 4750.5, 9928, and 38211 of the Vehicle Code, relating to vehicles.

LEGISLATIVE COUNSEL’S DIGEST

AB 2321, as amended, Rodriguez. Vehicles: registration and transfers of title or interest: use tax.

Existing law requires the Department of Motor Vehicles to withhold the registration or the transfer of registration of any vehicle or vessel, and to withhold identification or transfer of ownership of any off-highway vehicle subject to identification, until the applicant for registration or identification pays to the department the use tax measured by the sales price of the vehicle or vessel as required by the Sales and Use Tax Law, together with penalty, except as specified. Existing law requires the department to transmit all collections of use tax and penalty to the State Board of Equalization.

This bill would require, in addition, that the department determine all local use taxes the applicant is responsible to pay by specific address data provided by the applicant, and where the vehicle or vessel is to be registered. The bill would require the department to transmit the begin delete address data to the board, and would make the data subject to specified information sharing provisions. end delete begin insert tax area codes and the amount of local use tax and penalty collections attributable to those tax area codes to the board. end insert This bill would require the board to allocate the use taxes transmitted by the department to the jurisdiction where the purchaser registers the purchased vehicle or vessel by the begin delete specific address end delete begin insert tax area code end insert data provided to the board by the department.

This bill would declare the intent of the Legislature that the department and the board administer the provisions relating to registration of vehicles and vessels and identification of off-highway vehicles for these purposes in a manner that ensures that applicable local sales taxes and local transaction and use taxes are collected and then remitted to the specific jurisdiction where the vehicle or vessel is registered.

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.  

Section 6292 of the Revenue and Taxation Code
is amended to read:

6292.  

(a) Except when the sale is by lease, when a mobilehome
or commercial coach required to be registered annually under the
Health and Safety Code or a vehicle required to be registered under
the Vehicle Code is sold at retail by other than a person licensed
or certificated pursuant to the Health and Safety Code or the
Vehicle Code as a manufacturer, remanufacturer, dealer,
dismantler, or lessor-retailer, subject to Section 11615.5 of the
Vehicle Code, the retailer is not required or authorized to collect
the use tax from the purchaser, but the purchaser of the vehicle
shall pay the use tax to the Department of Housing and Community
Development acting for and on behalf of the board pursuant to
Section 18123 of the Health and Safety Code or to the Department
of Motor Vehicles acting for and on behalf of the board pursuant
to Section 4750.5 of the Vehicle Code.

(b) If the purchaser makes an application to either department
that is not timely, and is subject to penalty because of delinquency
in effecting registration or transfer of registration of the vehicle,
he or she then becomes liable also for penalty as specified in
Section 6591, but no interest shall accrue.

(c) Application to the appropriate department by the purchaser
relieves the purchaser of the obligation to file a return with the
board under Section 6452.

(d) If the purchaser does not make application to either
department, or does not pay the amount of use tax due, or files a
return with the board under Section 6455 that is not timely, interest
and penalties shall apply with respect to the unpaid amount as
provided in Chapter 5 (commencing with Section 6451).

(e) Use taxes collected by the Department of Motor Vehicles
and transmitted to the board pursuant to Section 4750.5 of the
Vehicle Code shall be allocated to the jurisdiction where the
purchaser registers the purchased vehicle, by the begin delete specific address end delete
begin insert tax area code end insert data provided to the board by the Department of
Motor Vehicles. The board shall reimburse the Department of
Motor Vehicles as prescribed in subdivision (d) of Section 4750.5
of the Vehicle Code.

SEC. 2.  

Section 6293 of the Revenue and Taxation Code is
amended to read:

6293.  

(a) Except when the sale is by lease, when a vehicle
subject to identification under Division 16.5 (commencing with
Section 38000) of the Vehicle Code or a vehicle that qualifies
under the permanent trailer identification plate program pursuant
to subdivision (a) of Section 5014.1 of the Vehicle Code, is sold
at retail by other than a person licensed or certificated pursuant to
the Vehicle Code as a manufacturer, remanufacturer, dealer,
dismantler, or lessor-retailer, subject to Section 11615.5 of the
Vehicle Code, or a person required to hold a seller’s permit
pursuant to Article 2 (commencing with Section 6066) of Chapter
2 by reason of the number, scope, and character of his or her sales
of those vehicles, the retailer is not required or authorized to collect
the use tax from the purchaser, but the purchaser of the vehicle
shall pay the use tax to the Department of Motor Vehicles acting
for and on behalf of the board pursuant to Section 38211 of the
Vehicle Code.

(b) If the purchaser makes an application to begin delete that end delete begin insert the end insert department
begin delete which end delete begin insert that end insert is not timely, and is subject to penalty because of
delinquency in effecting identification or transfer of ownership of
the vehicle, he or she then becomes liable also for penalty as
specified in Section 6591 of this code, but no interest shall accrue.

(c) Application to begin delete that end delete begin insert the end insert department by the purchaser relieves
the purchaser of the obligation to file a return with the board under
Section 6452.

(d) If the purchaser does not make application to begin delete that end delete begin insert the end insert
department, or does not pay the amount of use tax due, or files a
return with the board under Section 6455 begin delete which end delete begin insert that end insert is not timely,
interest and penalties shall apply with respect to the unpaid amount
as provided in Chapter 5 (commencing with Section 6451).

begin insert

(e) Use taxes collected by the Department of Motor Vehicles
and transmitted to the board pursuant to Section 38211 of the
Vehicle Code shall be allocated to the jurisdiction where the
purchaser registers the purchased vehicle, by the tax area code
data provided to the board by the Department of Motor Vehicles.
The board shall reimburse the Department of Motor Vehicles as
prescribed in subdivision (d) of Section 38211 of the Vehicle Code.

end insert

SEC. 3.  

Section 6294 of the Revenue and Taxation Code is
amended to read:

6294.  

(a) When an undocumented vessel required to be
registered under the Vehicle Code is sold at retail by other than a
person holding a seller’s permit and regularly engaged in the
business of selling vessels, the retailer is not required or authorized
to collect the use tax from the purchaser, but the purchaser of the
vessel must pay the use tax to the Department of Motor Vehicles
acting for, and on behalf of, the board pursuant to Section 9928
of the Vehicle Code.

(b) If the purchaser makes an application to the department that
is not timely, and is subject to penalty because of delinquency in
effecting registration or transfer of registration of the
undocumented vessel, he or she then becomes liable also for
penalty as specified in Section 6591, but no interest shall accrue.

(c) Application to the department by the purchaser shall relieve
the purchaser of the obligation to file a return with the board under
Section 6452.

(d) If the purchaser does not make application to either
department, or does not pay the amount of use tax due, or files a
return with the board under Section 6455 that is not timely, interest
and penalties shall apply with respect to the unpaid amount as
provided in Chapter 5 (commencing with Section 6451).

(e) Use taxes collected by the Department of Motor Vehicles
and transmitted to the board pursuant to Section 9928 of the
Vehicle Code shall be allocated to the jurisdiction where the
purchaser registers the purchased vessel, by the begin delete specific address end delete
begin insert tax area code end insert data provided to the board by the Department of
Motor Vehicles. The board shall reimburse the Department of
Motor Vehicles as prescribed in subdivision (d) of Section 9928
of the Vehicle Code.

SEC. 4.  

Section 4750.5 of the Vehicle Code is amended to
read:

4750.5.  

(a) The department shall withhold the registration or
the transfer of registration of a vehicle sold at retail to an applicant
by a person other than a vehicle manufacturer or dealer holding a
license and certificate issued pursuant to Chapter 4 (commencing
with Section 11700) of Division 5, or an automobile dismantler
holding a license and certificate issued pursuant to Chapter 3
(commencing with Section 11500) of Division 5, or a lessor-retailer
holding a license issued pursuant to Chapter 3.5 (commencing
with Section 11600) of Division 5, and subject to the provisions
of Section 11615.5, until the applicant pays to the department the
use tax measured by the sales price of the vehicle as required by
the Sales and Use Tax Law (Part 1 (commencing with Section
6001) of Division 2 of the Revenue and Taxation Code), together
with penalty, if any, unless the State Board of Equalization finds
that no use tax is due. If the applicant so desires, he or she may
pay the use tax and penalty, if any, to the department so as to secure
immediate action upon his or her application for registration or
transfer of registration, and thereafter he or she may apply through
the Department of Motor Vehicles to the State Board of
Equalization under the Sales and Use Tax Law for a refund of the
amount paid.

(b) (1) If applicable, the department shall determine all local
use taxes that the applicant is responsible to pay by specific address
data provided by the applicant and to which the vehicle shall be
registered. begin delete The department shall utilize all available tools, including
those available through the State Board of Equalization, to
determine the correct use tax rates to apply to the applicant. end delete

(2) Using the specific address data provided by the applicant
and to which the vehicle shall be registered, the department shall
identify the correct tax area code for the applicable local
jurisdiction to which the vehicle shall be registered and to which
the local use tax shall be allocated. The State Board of Equalization
shall provide a list of state tax area codes applicable to each
jurisdiction for purposes of allocating the local use taxes directly,
pursuant to 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) and the Transactions and Use
Tax Law (Part 1.6 (commencing with Section 7251) of Division
2 of the Revenue and Taxation Code).

(c) The department shall transmit all collections of use tax and
penalty made under this section to the State Board of Equalization.
The department also shall begin delete collect and transmit to the board specific
address data provided by applicants upon application and to which
a purchased vehicle will be registered, for proper allocation of use
tax collections. The transmitted data shall be subject to the
requirements of Section 7056 of the Revenue and Taxation Code. end delete
begin insert transmit the tax area codes and the amount of local use tax and
penalty collections attributable to those tax area codes to the board
for the proper direct allocation of local use tax collections. end insert This
transmittal shall be made at least monthly, accompanied by a
schedule in the form that the department and board may prescribe.

(d) The State Board of Equalization shall reimburse the
department for its costs incurred in carrying out the provisions of
this section. The reimbursement shall be effected under agreement
between the agencies, approved by the Department of Finance.

(e) In computing any use tax or penalty under this section, dollar
fractions shall be disregarded in the manner specified in Section
9559. Payment of tax and penalty on this basis shall be deemed
full compliance with the requirements of the Sales and Use Tax
Law and local transaction and use tax law insofar as they are
applicable to the use of vehicles to which this section relates.

(f) It is the intent of the Legislature that the department and the
State Board of Equalization administer this part in a manner that
ensures that applicable Bradley-Burns uniform local begin delete sales end delete begin insert use end insert taxes
and local transaction and use taxes are collected and then remitted
to the specific jurisdiction where the vehicle is registered.

SEC. 5.  

Section 9928 of the Vehicle Code is amended to read:

9928.  

(a) The department shall withhold the certificate of
number or the transfer of registration of a vessel sold at retail to
an applicant by a person other than a person holding a seller’s
permit pursuant to Section 6066 of the Revenue and Taxation
Code, and regularly engaged in the business of selling vessels,
until the applicant pays to the department the use tax measured by
the sales price of the vessel as required by the Sales and Use Tax
Law (Part 1 (commencing with Section 6001) of Division 2 of the
Revenue and Taxation Code), together with penalty, if any, unless
the State Board of Equalization finds that no use tax is due. If the
applicant so desires, he or she may pay the use tax and penalty, if
any, to the department so as to secure immediate action upon his
or her application for registration or transfer of registration and
thereafter he or she may apply through the Department of Motor
Vehicles to the State Board of Equalization under the Sales and
Use Tax Law for a refund of the amount paid.

(b) (1) If applicable, the department shall determine all local
use taxes that the applicant is responsible to pay by specific address
data provided by the applicant and to which the vessel shall be
registered. begin delete The department shall utilize all available tools, including
those available through the State Board of Equalization, to
determine the correct use tax rates to apply to the applicant. end delete

(2) Using the specific address data provided by the applicant
and to which the vehicle shall be registered, the department shall
identify the correct tax area code for the applicable local
jurisdiction to which the vessel shall be registered and to which
the local use tax shall be allocated. The State Board of Equalization
shall provide a list of state tax area codes applicable to each
jurisdiction for purposes of allocating the local use taxes directly,
pursuant to 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) and the Transactions and Use
Tax Law (Part 1.6 (commencing with Section 7251) of Division
2 of the Revenue and Taxation Code).

(c) The department shall transmit all collections of the use tax
and penalty made under this section to the State Board of
Equalization. The department also shall begin delete collect and transmit to the
board specific address data provided by applicants upon application
and to which a purchased vessel will be registered, for proper
allocation of use tax collections. The transmitted data shall be
subject to the requirements of Section 7056 of the Revenue and
Taxation Code. end delete begin insert transmit the tax area codes and the amount of
local use tax and penalty collections attributable to those tax area
codes to the board for the proper direct allocation of local use tax
collections. end insert This transmittal shall be made at least monthly,
accompanied by a schedule in the form that the department and
board may prescribe.

(d) The State Board of Equalization shall reimburse the
department for its costs incurred in carrying out the provisions of
this section.

(e) In computing any use tax or penalty under this section, dollar
fractions shall be disregarded in the manner specified in Section
9559. Payment of tax and penalty on this basis shall be deemed
full compliance with the requirements of the Sales and Use Tax
Law and local transaction and use tax law insofar as they are
applicable to the use of vessels to which this section relates.

(f) The department and the State Board of Equalization shall
enter into an agreement for the collection of the use tax pursuant
to this section and Section 6294 of the Revenue and Taxation Code.
The agreement shall specify the procedures agreed upon by the
department and the board for collection of the tax and the
reimbursement provided for in subdivision (d). The agreement
shall be approved by the Department of Finance.

(g) It is the intent of the Legislature that the department and the
State Board of Equalization administer this part in a manner that
ensures that applicable Bradley-Burns uniform local begin delete sales end delete begin insert use end insert taxes
and local transaction and use taxes are collected and then remitted
to the specific jurisdiction where the vessel is registered.

SEC. 6.  

Section 38211 of the Vehicle Code is amended to read:

38211.  

(a) The department shall withhold identification of or
the transfer of ownership of a vehicle subject to identification
under this division until the applicant pays to the department the
use tax measured by the sales price of the vehicle as required by
the Sales and Use Tax Law, together with penalty, if any, unless
the purchaser presents evidence on a form prescribed by the State
Board of Equalization that sales tax will be paid by the seller or
that use tax has been collected by the seller or that the State Board
of Equalization finds that no use tax is due. If the applicant so
desires, he or she may pay the use tax and penalty, if any, to the
department so as to secure immediate action upon his or her
application for identification or transfer of ownership, and
thereafter he or she may apply through the Department of Motor
Vehicles to the State Board of Equalization under the Sales and
Use Tax Law for a refund of the amount paid.

(b) (1) If applicable, the department shall determine all local
use taxes that the applicant is responsible to pay by specific address
data provided by the applicant and to which the vehicle shall be
registered. begin delete The department shall utilize all available tools, including
those available through the State Board of Equalization, to
determine the correct use tax rates to apply to the applicant. end delete

(2) Using the specific address data provided by the applicant
and to which the vehicle shall be registered, the department shall
identify the correct tax area code for the applicable local
jurisdiction to which the vehicle shall be registered and to which
the local use tax shall be allocated. The State Board of Equalization
shall provide a list of state tax area codes applicable to each
jurisdiction for purposes of allocating the local use taxes directly,
pursuant to 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) and the Transactions and Use
Tax Law (Part 1.6 (commencing with Section 7251) of Division
2 of the Revenue and Taxation Code).

(c) The department shall transmit all collections of use tax and
penalty made under this section to the State Board of Equalization.
The department also shall begin delete collect and transmit to the board specific
address data provided by applicants upon application and to which
a purchased vehicle will be registered, for proper allocation of use
tax collections. The transmitted data shall be subject to the
requirements of Section 7056 of the Revenue and Taxation Code. end delete
begin insert transmit the tax area codes and the amount of local use tax and
penalty collections attributable to those tax area codes to the board
for the proper direct allocation of local use tax collections. end insert This
transmittal shall be made at least monthly, accompanied by a
schedule in the form that the department and board may prescribe.

(d) The State Board of Equalization shall reimburse the
department for its costs incurred in carrying out the provisions of
this section. The reimbursement shall be effected under agreement
between the agencies, approved by the Department of Finance.

(e) In computing any use tax or penalty under this section, dollar
fractions shall be disregarded in the manner specified in Section
9559. Payment of tax and penalty on this basis shall be deemed
full compliance with the requirements of the Sales and Use Tax
Law and local transaction and use tax law insofar as they are
applicable to the use of vehicles to which this section relates.

(f) It is the intent of the Legislature that the department and the
State Board of Equalization administer this part in a manner that
ensures that applicable Bradley-Burns uniform local begin delete sales end delete begin insert use end insert taxes
and local transaction and use taxes are collected and then remitted
to the specific jurisdiction where the vehicle is registered.