BILL NUMBER: SB 330	CHAPTERED  10/10/99

	CHAPTER   799
	FILED WITH SECRETARY OF STATE   OCTOBER 10, 1999
	APPROVED BY GOVERNOR   OCTOBER 7, 1999
	PASSED THE SENATE   AUGUST 31, 1999
	PASSED THE ASSEMBLY   AUGUST 23, 1999
	AMENDED IN ASSEMBLY   AUGUST 19, 1999

INTRODUCED BY   Senator Wright
   (Coauthor:  Assembly Member Lempert)

                        FEBRUARY 8, 1999

   An act to add Section 6010.30 to the Revenue and Taxation Code,
relating to taxation, to take effect immediately, tax levy.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 330, C. Wright.  Sales and use taxes:  exemptions:  works of
art.
   The Sales and Use Tax Law imposes a tax on the gross receipts from
the sale in this state of, or the storage, use, or other consumption
in this state of, tangible personal property.  That law defines a
sale to include a transfer of title or possession, as specified, and
provides various exemptions from that tax.
   This bill would provide that a sale and purchase does not include
the transfer of original drawings, sketches, illustrations, or
paintings by an artist or designer at a social gathering for
entertainment purposes, provided specified conditions are met.
   Counties and cities are authorized to impose local sales and use
taxes in conformity with state sales and use taxes.  Exemption from
state sales and use taxes enacted by the Legislature are incorporated
into the local taxes.
   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 local agencies for sales and use tax revenues
lost by them pursuant to this bill.
  This bill would take effect immediately as a tax levy, but its
operative date would depend on its effective date.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 6010.30 is added to the Revenue and Taxation
Code, to read:
   6010.30.  (a) "Sale" and "purchase," for the purpose of this part,
do not include the transfer of original drawings, sketches,
illustrations, or paintings by an artist or designer at a social
gathering for entertainment purposes, if all of the following
requirements are met:
   (1) Substantially all of the drawings, sketches, illustrations, or
paintings are delivered by the artist or designer to a person or
persons other than the purchaser.
   (2) Substantially all of the drawings, sketches, illustrations, or
paintings are received by a person or persons, other than the
purchaser, at no cost to the person or persons who become the owner
of the drawings, sketches, illustrations, or paintings.
   (3) The charge for the drawings, sketches, illustrations, or
paintings is based on a preset fee.
   (4) The fee charged for the drawings, sketches, illustrations, or
paintings is contingent upon a minimum number of at least three
drawings, sketches, illustrations, or paintings to be produced by the
artist or designer at the social gathering.
   (b) For purposes of this section, "substantially all" means 80
percent or more.
  SEC. 2.  Notwithstanding Section 2230 of the Revenue and Taxation
Code, no appropriation is made by this act and the state shall not
reimburse any local agency for any sales and use tax revenues lost by
it under this act.
  SEC. 3.  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 90 days
after the effective date of this act.