BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 598|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
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UNFINISHED BUSINESS
Bill No: SB 598
Author: Hill (D)
Amended: 6/29/15
Vote: 21
SENATE GOVERNANCE & FIN. COMMITTEE: 7-0, 4/8/15
AYES: Hertzberg, Nguyen, Bates, Beall, Hernandez, Lara, Pavley
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
SENATE FLOOR: 35-0, 4/30/15
AYES: Allen, Anderson, Bates, Beall, Berryhill, Block,
Cannella, De León, Fuller, Gaines, Galgiani, Hall, Hancock,
Hertzberg, Hill, Hueso, Huff, Jackson, Lara, Leno, Leyva, Liu,
McGuire, Mendoza, Mitchell, Monning, Moorlach, Nguyen,
Nielsen, Pan, Pavley, Roth, Stone, Wieckowski, Wolk
NO VOTE RECORDED: Hernandez, Morrell, Runner, Vidak
ASSEMBLY FLOOR: 79-0, 7/16/15 (Consent) - See last page for
vote
SUBJECT: Sales and use taxes: consumer designation: all
volunteer fire department
SOURCE: Author
DIGEST: This bill designates volunteer fire departments as
consumers under the Sales and Use Tax Law.
Assembly Amendments move forward this bill's sunset date from
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Page 2
January 1, 2026 to January 1, 2021, and made technical and
grammatical changes.
ANALYSIS:
Existing law:
1) Imposes the sales tax on every retailer engaged in business
in this state that sells tangible personal property, and
requires them to collect the appropriate tax from the consumer
at purchase. Sales tax applies whenever a retail sale is
made, unless it is a resale in the regular course of business.
2) Provides that retailers must generally obtain a seller's
permit, and report to the Board of Equalization (BOE) any
sales tax collected from purchasers quarterly on a return.
Nonprofits, public agencies, and charities are generally
treated the same way as any other retailer, and don't have
blanket exemptions from collecting and remitting the tax,
unless otherwise exempted.
3) Designates certain sellers as "consumers," meaning that the
law considers the tax paid when they purchase property, and
the seller neither obtains a permit, nor collects the tax from
the purchaser at sale before remitting to BOE.
4) Specifies that "consumers" include, among others:
Licensed medical and veterinary professionals dispensing
specified products during the course of performing
professional services,
Qualified itinerant vendors,
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The Department of Transportation's leases and sales of
automobiles, and
Nonprofit organizations that intermittently or
irregularly sell food, nonalcoholic beverages, and other
property made by the organization's members.
This bill:
1) Designates volunteer fire departments as consumers under the
Sales and Use Tax Law for all its sales of tangible personal
property, so long as its profits are solely and exclusively
used to further the department's purposes.
2) Requires volunteer fire departments, in order to qualify for
consumer status, to:
a) Pay its members hourly or per incident, not with a
regular salary,
b) Have as its purpose the protection of life, property,
and the environment within a designated geographic area
from fires, disasters, and emergency incidents through
education, prevention, training, and emergency response,
c) Be organized as a tax exempt organization for state and
federal purposes, and
d) Meet the definition of "volunteer fire department," used
in the welfare exemption from property tax.
3) Provides that consumer treatment does not apply to volunteer
fire departments with more than $100,000 in receipts from the
sale of tangible personal property in each of the last two
calendar years.
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4) Sunsets on January 1, 2021.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Assembly Appropriations Committee, SB 598
results in revenue losses of $42,000 annually.
SUPPORT: (Verified8/13/15)
Ben Lomond Fire Protection District
Butte Valley Fire Protection District
California Fire Chiefs Association
California State Firefighters' Association
County of San Mateo
Fire District Association of California
La Honda Fire Brigade
Pliocene Ridge Community Services District
Wildland Residents Association
OPPOSITION: (Verified8/13/15)
None received
ARGUMENTS IN SUPPORT: According to the author, " SB 598 is
the winner of my annual 'Ought to Be a Law Contest' winner.
All-volunteer fire departments across the state solely rely on
fundraisers to buy lifesaving equipment. The La Honda Fire
Brigade in my district is no different. Their livelihood relies
exclusively on volunteers, from the 14 individuals who serve as
firefighters, to the board members who organize fundraising
efforts like the annual pancake breakfast and crab cioppino
dinner. Unfortunately any fundraisers dealing with selling
hot/prepared food or tangible goods are subject to California
sales tax. SB 598 would simply exempt All-volunteer fire
departments from having to pay sales tax on their fundraising
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efforts. All of the money raised would be able to stay with
them. If they are able to raise $1000 at a pancake breakfast -
they will keep the full $1000 and not have to send $92.50 (San
Mateo County has a sales tax rate of 9.25%) to the State.
Everyday these volunteers put their lives on the line and
provide an important resource to the communities they serve. We
should help them any way we can and allowing them to keep all of
their fundraising dollars is an important first step.
ASSEMBLY FLOOR: 79-0, 7/16/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang,
Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle,
Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina
Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gray,
Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones,
Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low,
Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin,
Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea,
Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago,
Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,
Wilk, Williams, Wood, Atkins
NO VOTE RECORDED: Gordon
Prepared by:Colin Grinnell / GOV. & F. / (916) 651-4119
8/13/15 13:52:33
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