SB 533, as amended, Pan. Cities and counties: sales and use tax agreements.
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. That law provides that for the purpose of a local sales tax adopted pursuant to that law, all retail sales are consummated at the place of business of the retailer unless otherwise specified.
Existing law prohibits a local agency, as defined to mean all cities and counties, from entering into any form of agreement with any other person that would involve the payment, transfer, diversion, or rebate of any amount of Bradley-Burns local taxbegin delete proceedsend deletebegin insert revenuesend insert for any purpose if the agreement
results in a reduction in the amount of revenue that is received by another local agency from a retailer that is located within the territorial jurisdiction of that other local agency, and the retailer continues to maintain a physical presence within the territorial jurisdiction of that other local agency, with specified exceptions, including an exception for an agreement to pay or rebate any Bradley-Burns local tax revenue relating to a buying company, as defined.
This bill would repeal that prohibition and instead prohibit, on or after January 1, 2016, a local agency from entering into any form of agreement that would result, directly or indirectly, in the payment, transfer, diversion, or rebate of Bradley-Burns local taxbegin delete proceedsend deletebegin insert revenuesend insert to any person, as defined, for any
purpose, if the agreement results in a reduction in the amount of Bradley-Burnsbegin insert localend insert taxbegin delete proceedsend deletebegin insert
revenuesend insert that, in the absence of the agreement, would be received by another local agency and the retailer continues to maintain a physical presence within the territorial jurisdiction of that other local agency, with specified exceptions. This bill would also impose specified notification and reporting requirements on a local agency entering into an agreement that results in a reduction of the amount of Bradley-Burnsbegin insert localend insert taxbegin delete proceeds,end deletebegin insert revenues,end insert that in the absence of the agreement, would be received by another local agency, prior to the ratification of that agreement. This bill would also require any local agency to post such an agreement on its Internet Web site, including
any agreements entered into prior tobegin delete the effective date of this billend deletebegin insert January 1, 2016,end insert that are still in effect. By imposing these notification and reporting requirements on a local agency, this bill would impose a state-mandated local program. This bill would exclude from these provisionsbegin delete a local agency that has a mutual tax revenue sharing agreement with each local agency that would be affected by the form of agreement generally prohibited by these provisions.end deletebegin insert any mutual tax revenue sharing agreement between local agencies to pay, transfer, or divert Bradley-Burns local tax revenues to another local agency, and where the agreement would not result,
directly or indirectly, in the payment, transfer, diversion, or rebate of those tax revenues to a retailer.end insert
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.
The people of the State of California do enact as follows:
Section 53084.5 of the Government Code is
2repealed.
Section 53084.5 is added to the Government Code, to
4read:
(a) On or after January 1, 2016, a local agency shall
6not enter into any form of agreement that would result, directly or
7indirectly, in the payment, transfer, diversion, or rebate of any tax
8revenue resulting from the imposition of a sales and use tax under
9the Bradley-Burns Uniform Local Sales and Use Tax Law (Part
101.5 (commencing with Section 7200) of Division 2 of the Revenue
11and Taxation Code) to any person for any purpose when both of
12the following apply:
13(1) The agreement results in a reduction in the amount of
14revenue under the Bradley-Burns Uniform Local Sales and Use
15Tax Law that, in the absence of the agreement, would be received
16by another local
agency.
17(2) The retailer continues to maintain a physical presence within
18the territorial jurisdiction of that other local agency.
19(b) (1) A local agency entering into an agreement that results
20in a reduction of the amount of revenue under the Bradley-Burns
21Uniform Local Sales and Use Tax Law that, in the absence of the
22agreement, would be received by another local agency shall post
23the proposed agreement on its Internet Web site for at least 30
24days prior to ratification or approval of that agreement by its
25governing body.
26(2) A local agency entering into an agreement that results in a
27reduction of the amount of revenue under the Bradley-Burns
28Uniform Local Sales and Use Tax Law that, in the absence
of the
29agreement, would be received by another local agency shall notify
30the other local agency by certified mail addressed to the attention
31of the chief executive of that other local agency at least 60 days
32prior to ratification or approval of that agreement by its governing
33body.
34(3) A local agency shall post any agreement on its Internet Web
35site it has entered into that results in a reduction of the amount of
36revenue under the Bradley-Burns Uniform Local Sales and Use
37Tax Law that, in the absence of the agreement, would be received
38by another local agency, including any agreements entered into
P4 1prior tobegin delete the effective date of this sectionend deletebegin insert January 1, 2016,end insert that are
2
still in effectbegin insert on and after that dateend insert.
3(c) For the purposes of this section, the following
terms have
4the following meanings:
5(1) “Local agency” means a chartered or general law city, a
6chartered or general law county, or a city and county, of this state.
7(2) “Person” means a person as defined in Section 6005 of the
8Revenue and Taxation Code.
9(3) “Physical presence” means the lease or ownership of any
10real property for the purpose of carrying on business operations.
11(4) “Retailer” means a retailer as defined by Section 6015 of
12the Revenue and Taxation Code.
13(d) This section shall not apply to any agreement by a local
14agency to pay or rebate any use tax revenue resulting from the
15imposition
of a use tax under the Bradley-Burns Uniform Local
16Sales and Use Tax Law relating to a use tax direct payment permit
17issued under Section 7051.3 of the Revenue and Taxation Code.
18(e) This section shall not be interpreted to limit the ability of a
19local agency to contract with or otherwise enter into an agreement
20pursuant to subdivision (b) of Section 7056 of the Revenue and
21Taxation Code.
22(f) This section shall not apply tobegin delete a local agency that has a begin insert any mutual tax revenue sharing
agreement between
23mutual tax revenue sharing agreement with each local agency that
24would be affected by the form of agreement prohibited by
25subdivision (a).end delete
26local agencies to pay, transfer, or divert tax revenues that would
27be received by a local agency resulting from the imposition of a
28sales and use tax under the Bradley-Burns Uniform Local Sales
29and Use Tax Law to another local agency, and where the
30agreement would not result, directly or indirectly, in the payment,
31transfer, diversion, or rebate of those tax revenues to a retailer.end insert
If the Commission on State Mandates determines that
33this act contains costs mandated by the state, reimbursement to
34local agencies and school districts for those costs shall be made
35pursuant to Part 7 (commencing with Section 17500) of Division
364 of Title 2 of the Government Code.
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