AB 2365,
as amended, Gipson. begin deleteSales and use tax exemption. end deletebegin insertSales and use taxes: exclusion: pawnbrokers: transfer of vested property.end insert
Existing sales and use tax laws impose 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.begin delete Existing law provides various exemptions from the taxes imposed by those laws.end deletebegin insert Existing law defines “sale” and “purchase” for these purposes and provides certain exclusions from those definitions.end insert
Existing law regulates pawnbrokers by, among other things, requiring every loan made by a pawnbroker for which
goods are received in pledge as security to be evidenced by a written contract, a copy of which is required to be furnished to the pledgor. Existing law requires the loan period of a loan contract to be no less than 4 months, and requires the loan contract to set forth the loan period, the date on which the loan is due and payable, and to clearly inform the pledgor of his or her right to redeem the pledge during the loan period. Existing law provides procedures by which a pawnbroker maybegin delete foreclose onend deletebegin insert become vested with the title toend insert pledged property.
This bill would declare the intent of the Legislature to enact legislation that would provide an exemption from sales and use taxes if an original pledgor reacquires from a pawnbroker tangible personal property he or she pledged to the pawnbroker as security for a loan within six months after title to the property is vested in the pawnbroker.
end deleteThis bill would provide that “sale” and “purchase” do not include the transfer of vested property, as defined, by a pawnbroker to a person who pledged the property to the pawnbroker as security for a loan if specified requirements are met, thus excluding that transfer from imposition of sales and use tax.
end insertbegin insertThe Bradley-Burns Uniform Local Sales and Use Tax Law authorizes cities and counties 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 insertExisting law requires the state to reimburse cities and counties for revenue losses caused by the enactment of sales and use tax exemptions.
end insertbegin insertThis bill would provide that, notwithstanding those provisions, no appropriation is made and the state shall not reimburse cities and counties 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 insertVote: 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 6010.15 is added to the end insertbegin insertRevenue and
2Taxation Codeend insertbegin insert, to read:end insert
(a) “Sale” and “purchase” for the purposes of this
4part do not include the transfer of title to vested property by a
5pawnbroker to a person who pledged the property to the
6pawnbroker as security for a loan and from whom title to the
7property transferred to the pawnbroker pursuant to Section 21201
8of the Financial Code, if both of the following requirements are
9met:
P3 1(1) The transfer occurs no more than six months after title to
2the property transferred to the pawnbroker from the person
3pursuant to Section 21201 of the Financial Code.
4(2) As consideration for the transfer of the property, the person
5is required to pay the pawnbroker only the remaining unpaid
6balance of the
amount borrowed under the loan as of the date the
7pawnbroker becomes vested with title to the property, together
8with one of the following:
9(A) For an original loan amount not exceeding two thousand
10four hundred ninety-nine dollars and ninety-nine cents ($2,499.99),
11charges and interest due under the loan pursuant to Chapter 2
12(commencing with Section 21200) of Division 8 of the Financial
13Code, from the date the pawnbroker is vested with title to the
14property to the date of the transfer to the person who pledged the
15property.
16 (B) For an original loan amount of two thousand five hundred
17dollars ($2,500) or more, charges and interest due in accordance
18with the last monthly contractual interest rate, from the date the
19pawnbroker is vested with title to the property until the date of the
20transfer to the person who pledged the property.
21(b) As used in this section:
22(1) “Pawnbroker” has the meaning described in Section 21000
23of the Financial Code.
24(2) “Vested property” has the meaning described in subdivision
25(b) of Section 21002 of the Financial Code.
Notwithstanding Section 2230 of the Revenue and
27Taxation Code, no appropriation is made by this act and the state
28shall not reimburse cities and counties for any sales and use tax
29revenues lost by them under this act.
This act provides for a tax levy within the meaning of
31Article IV of the Constitution and shall go into immediate effect.
It is the intent of the Legislature to enact
33legislation that would provide an exemption from sales and use
34taxes if an original pledgor reacquires from a pawnbroker tangible
35personal property he or she pledged to the pawnbroker as security
36for a loan within six months after title to the property is vested in
37the pawnbroker.
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