Amended in Assembly April 26, 2016

Amended in Assembly March 28, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 2673


Introduced by Assembly Member Harper

(Coauthors: Assembly Membersbegin delete Steinorthend deletebegin insert Brough, O'Donnell, end insertbegin insertSteinorth,end insert and Wilk)

February 19, 2016


An act to add Section 6377.5 to, and to add and repeal Sections 17053.55 and 23655 of, the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.

LEGISLATIVE COUNSEL’S DIGEST

AB 2673, as amended, Harper. Sales and use tax exemption: income tax credits: hydrogen refueling station equipment.

(1) 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. Existing law provides various exemptions from the taxes imposed by those laws.

This bill, on and after January 1, 2017, and before January 1, 2030, would exempt from those taxes the gross receipts from the sale of, and the storage, use, or other consumption in this state of, hydrogen refueling station equipment, as defined, purchased by a recipient of a grant pursuant to the Alternative and Renewable Fuel and Vehicle Technology Program for the development of hydrogen refueling stations.

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.

(2) The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws.

This bill would allow to a grant recipient described above a credit against those taxes for the taxable years beginning on or after January 1, 2016, and before January 1, 2017, for an amount equal to the sum of the sales tax reimbursements or use taxes previously paid by a grant recipient for hydrogen refueling station equipment during the period from January 1, 2014, to January 1, 2017, as provided. The bill would repeal these provisions as of December 1, 2017.

(3) This bill would take effect immediately as a tax levy.

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

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

Section 6377.5 is added to the Revenue and
2Taxation Code
, to read:

3

6377.5.  

(a) On and after January 1, 2017,begin insert and before January
41, 2030,end insert
there are exempted from the taxes imposed by this part
5
begin delete theend deletebegin insert both of the following:end insert

6begin insert(1)end insertbegin insertend insertbegin insertTheend insert gross receipts from the salebegin delete of, and theend deletebegin insert of hydrogen
7refueling station equipment to a qualified grant recipient.end insert

8begin insert(2)end insertbegin insertend insertbegin insertTheend insert storage, use, or other consumption in this statebegin delete of,end deletebegin insert ofend insert
9 hydrogen refueling station equipmentbegin delete to orend delete by a qualified grant
10
begin delete recipient before January 1, 2030.end deletebegin insert recipient.end insert

11(b) As used in this section, the following definitions shall apply:

P3    1(1) “Qualified grant recipient” means a person who has received
2a grant pursuant to Section 44272 of the Health and Safety Code
3for the development of hydrogen refueling stations within this
4state.

5(2) “Hydrogen refueling station” means any motor vehicle
6fueling station which provides hydrogen fuel, either exclusively
7or concurrently with other motor vehicle fuels, for use by fuel cell
8electric vehicles.

9(3) “Hydrogen refueling station equipment” means any of the
10following:

11(A) Equipment, including, but not limited to, machinery,
12devices, contrivances, and component, repair, or replacement parts,
13whether purchased separately or in conjunction with a complete
14machine and regardless of whether the equipment or component
15parts are assembled by the grant recipient or another party, to be
16located at a hydrogen refueling station within this state and used
17exclusively for the distribution, dispensing, storage, or production
18of hydrogen fuel for fuel cell electric vehicles, including, but not
19limited to, pressurized storage, compression, pre-cooling, and
20pumping of hydrogen fuel.

21(B) Personal property that is software or software services,
22regardless of location, and computer, computer-type, or data
23processing hardware or hardware services, regardless of location,
24that is used exclusively for the distribution, dispensing, storage,
25or production of hydrogen fuel at a hydrogen refueling station for
26fuel cell electric vehicles.

27(C) Any other personal property required to operate, control,
28regulate, or maintain the hydrogen refueling station equipment set
29forth in subparagraph (A) or (B).

30(4) “Fuel cell” means a device that directly or indirectly creates
31electricity through an electrochemical process using hydrogen, or
32hydrogen-rich, fuel and oxygen or another oxidizing agent.

33

SEC. 2.  

Section 17053.55 is added to the Revenue and Taxation
34Code
, to read:

35

17053.55.  

(a) For the taxable years beginning on or after
36January 1, 2016, and before January 1, 2017, there shall be allowed
37to a qualified grant recipient a credit against the “net tax,” as
38 defined in Section 17039, for the taxable year, in an amount equal
39to the sum of sales tax reimbursements and use taxes previously
40paid during the period from January 1, 2014, to January 1, 2017,
P4    1by the qualified grant recipient for hydrogen refueling station
2 equipment.

3(b) For the purposes of this section, the terms “qualified grant
4recipient” and “hydrogen refueling station equipment” have the
5same meanings as specified in Section 6377.5.

6(c) In the case of a pass-thru entity, a credit under this section
7shall be allowed to the pass-thru entity and passed through to the
8partners or shareholders in accordance with the applicable
9provisions of this part. As used in this subdivision, “pass-thru
10entity” means any partnership or “S” corporation.

11(d) If a credit otherwise allowed by this section exceeds the “net
12tax” for the taxable year, that portion of the credit that exceeds the
13“net tax” may be carried over and added to the credit in the
14succeeding taxable years, if necessary, until the credit is exhausted.

15(e) The Franchise Tax Board may prescribe rules, guidelines,
16or procedures necessary or appropriate to carry out the purposes
17of this section. Chapter 3.5 (commencing with Section 11340) of
18Part 1 of Division 3 of Title 2 of the Government Code shall not
19apply to any rule, guideline, or procedure prescribed by the
20Franchise Tax Board pursuant to this section.

21(f) Section 41 does not apply to the credit allowed by this
22section.

23(g) This section shall remain in effect only until December 1,
242017, and as of that date is repealed.

25

SEC. 3.  

Section 23655 is added to the Revenue and Taxation
26Code
, to read:

27

23655.  

(a) For the taxable years beginning on or after January
281, 2016, and before January 1, 2017, there shall be allowed to a
29qualified grant recipient a credit against the “tax,” as defined in
30Section 23036, for the taxable year in an amount equal to the sum
31of sales tax reimbursements and use taxes previously paid during
32the period from January 1, 2014, to January 1, 2017, by the
33qualified grant recipient for hydrogen refueling station equipment.

34(b) For the purposes of this section, the terms “qualified grant
35recipient” and “hydrogen refueling station equipment” have the
36same meanings as specified in Section 6377.5.

37(c) In the case of a pass-thru entity, a credit under this section
38shall be allowed to the pass-thru entity and passed through to the
39partners or shareholders in accordance with the applicable
P5    1provisions of this part. As used in this subdivision, “pass-thru
2entity” means any partnership.

3(d) If a credit otherwise allowed by this section exceeds the
4“tax” for the taxable year, that portion of the credit that exceeds
5the “tax” may be carried over and added to the credit in the
6succeeding taxable years, if necessary, until the credit is exhausted.

7(e) The Franchise Tax Board may prescribe rules, guidelines,
8or procedures necessary or appropriate to carry out the purposes
9of this section. Chapter 3.5 (commencing with Section 11340) of
10Part 1 of Division 3 of Title 2 of the Government Code shall not
11apply to any rule, guideline, or procedure prescribed by the
12Franchise Tax Board pursuant to this section.

13(f) Section 41 does not apply to the credit allowed by this
14section.

15(g) This section shall remain in effect only until December 1,
162017, and as of that date is repealed.

17

SEC. 4.  

Notwithstanding Section 2230 of the Revenue and
18Taxation Code, no appropriation is made by this act and the state
19shall not reimburse any local agency for any sales and use tax
20revenues lost by it under this act.

21

SEC. 5.  

This act provides for a tax levy within the meaning of
22Article IV of the Constitution and shall go into immediate effect.



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