AB 2518, as introduced, Gomez. Sales and use taxes: exemption: nonprofit corporation: building and construction supplies.
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 and use of, or other consumption in this state of, building and construction supplies, materials, equipment, and machinery, and the parts thereof, that are purchased for a specified use by a nonprofit corporation, as provided. The bill would make the purchaser liable for the payment of sales tax if the building and construction supplies, materials, equipment, and machinery, and the parts thereof, are removed, converted, or used in a manner not qualifying for the exemption.
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 and specified state sales and use taxes the proceeds of which are deposited into the Local Revenue Fund, the Local Revenue Fund 2011, the Local Public Safety Fund, and the Education Protection Account.
This act provides for a tax levy within the meaning of Article IV of the Constitution and shall go into immediate effect.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 6356.9 is added to the Revenue and
2Taxation Code, to read:
(a) There are exempted from the taxes imposed by
4this part the gross receipts from the sale of, and the storage and
5use of, or other consumption in this state of, building and
6construction supplies, materials, equipment, and machinery, and
7the parts thereof, that are purchased for use by a nonprofit
8corporation that is exempt from federal income taxation as an
9organization described in Section 501(c)(3) of the Internal Revenue
10Code that has received a welfare exemption under Section 214.15,
11for construction of properties that are intended to be sold and are
12sold to low-income families.
13(b) (1) Notwithstanding any provision of the Bradley-Burns
14Uniform Local Sales and Use Tax Law (Part 1.5 (commencing
15with Section 7200)) or
the Transactions and Use Tax Law (Part
161.6 (commencing with Section 7251)), the exemption established
17by this section does not apply with respect to any tax levied by a
18county, city, or district pursuant to, or in accordance with, either
19of those laws.
20(2) Notwithstanding subdivision (a), the exemption established
21by this section shall not apply with respect to any tax levied
22pursuant to Section 6051.2 or 6201.2, Section 35 and subdivision
23(f) of Section 36 of Article XIII of the California Constitution, or
24any tax levied pursuant to Section 6051 or 6201 that is deposited
P3 1in the State Treasury to the credit of the Local Revenue Fund 2011
2pursuant to Section 6051.15 or 6201.15.
3(c) If a purchaser certifies in writing to the seller that the
4building and construction supplies, materials, equipment, and
5machinery, and the parts thereof, purchased without payment of
6the tax will be
used in a manner entitling the seller to regard the
7gross receipts from the sale as exempt from the sales tax, and
8within one year from the date of purchase, the purchaser (1)
9removes the building and construction supplies, materials,
10equipment, and machinery, and the parts thereof, outside California,
11(2) converts the building and construction supplies, materials,
12equipment, and machinery, and the parts thereof, for use in a
13manner not qualifying for the exemption, or (3) uses that building
14and construction supplies, materials, equipment, and machinery,
15and the parts thereof, in a manner not qualifying for the exemption,
16the purchaser shall be liable for payment of sales tax, with
17applicable interest, as if the purchaser were a retailer making a
18retail sale of the building and construction supplies, materials,
19equipment, and machinery, and the parts thereof, at the time the
20building and construction supplies, materials, equipment, and
21machinery, and the parts thereof, are so removed, converted, or
22used, and
the cost of the building and construction supplies,
23materials, equipment, and machinery, and the parts thereof, to the
24purchaser shall be deemed the gross receipts from that retail sale.
This act provides for a tax levy within the meaning of
26Article IV of the Constitution and shall go into immediate effect.
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