Amended in Assembly April 28, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 2518

Introduced by Assembly Member Gomez

February 19, 2016

An act to add begin insert and repeal end insert Section 6356.9 begin delete to end delete begin insert of end insert the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.

LEGISLATIVE COUNSEL’S DIGEST

AB 2518, as amended, 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 begin delete bill end delete begin insert bill, for a period of five years after the operative date of this bill, end insert would partially exempt from those taxes the gross receipts from the sale of, and the begin delete storage and use of, end delete begin insert storage, use, end insert 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.

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This bill would take effect immediately as a tax levy, but its operative date would depend on its effective date.

end insert begin delete

This act provides for a tax levy within the meaning of Article IV of the Constitution and shall go into immediate effect.

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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 6356.9 is added to the Revenue and
Taxation Code, to read:

6356.9.  

(a) There are exempted from the taxes imposed by
this part the gross receipts from the sale of, and the begin delete storage and
use of, end delete begin insert storage, use, end insert or other consumption in this state of, building
and construction supplies, materials, equipment, and machinery,
and the parts thereof, that are purchased for use by a nonprofit
corporation that is exempt from federal income taxation as an
organization described in Section 501(c)(3) of the Internal Revenue
Code that has received a welfare exemption under Section 214.15,
for construction begin insert and rehabilitation end insert of properties begin insert in this state end insert that
are intended to be sold and are sold to begin delete low-income families. end delete begin insert persons
and families of low income. end insert

(b) (1) Notwithstanding any provision of the Bradley-Burns
Uniform Local Sales and Use Tax Law (Part 1.5 (commencing
with Section 7200)) or the Transactions and Use Tax Law (Part
1.6 (commencing with Section 7251)), the exemption established
by this section does not apply with respect to any tax levied by a
county, city, or district pursuant to, or in accordance with, either
of those laws.

(2) Notwithstanding subdivision (a), the exemption established
by this section shall not apply with respect to any tax levied
pursuant to Section 6051.2 or 6201.2, Section 35 and subdivision
(f) of Section 36 of Article XIII of the California Constitution, or
any tax levied pursuant to Section 6051 or 6201 that is deposited
in the State Treasury to the credit of the Local Revenue Fund 2011
pursuant to Section 6051.15 or 6201.15.

(c) If a purchaser certifies in writing to the seller that the
building and construction supplies, materials, equipment, and
machinery, and the parts thereof, purchased without payment of
the tax will be used in a manner entitling the seller to regard the
gross receipts from the sale as exempt from the sales tax, and
within one year from the date of purchase, the purchaser (1)
removes the building and construction supplies, materials,
equipment, and machinery, and the parts thereof, outside California,
(2) converts the building and construction supplies, materials,
equipment, and machinery, and the parts thereof, for use in a
manner not qualifying for the exemption, or (3) uses that building
and construction supplies, materials, equipment, and machinery,
and the parts thereof, in a manner not qualifying for the exemption,
the purchaser shall be liable for payment of sales tax, with
applicable interest, as if the purchaser were a retailer making a
retail sale of the building and construction supplies, materials,
equipment, and machinery, and the parts thereof, at the time the
building and construction supplies, materials, equipment, and
machinery, and the parts thereof, are so removed, converted, or
used, and the cost of the building and construction supplies,
materials, equipment, and machinery, and the parts thereof, to the
purchaser shall be deemed the gross receipts from that retail sale.

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(d) For purposes of this section, “persons and families of low
income” has the same meaning as that term is defined in Section
50093 of the Health and Safety Code.

end insert begin insert

(e) This section shall become inoperative five years after the
operative date of this section and as of that date is repealed.

end insert

begin delete

SEC. 2.  

This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.

end delete

begin insert

begin insert SEC. 2. end insert   

end insert begin insert

This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.
However, the provisions of this act shall become operative on the
first day of the first calendar quarter commencing more than 180
days after the effective date of this act.

end insert