BILL NUMBER: AB 2676	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Bass

                        FEBRUARY 19, 2010

   An act to amend Sections 6452.1, 6453, 6487.3, and 18510 of the
Revenue and Taxation Code, relating to taxation.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2676, as introduced, Bass. Sales and use taxes: use tax: income
tax return.
   The Sales and Use Tax Law imposes a sales tax on retailers
measured by the gross receipts from the sale of tangible personal
property sold at retail in this state, or a use tax 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, measured by sales price. Use tax is imposed on the
purchaser, who is liable for the tax and must pay the tax to the
State Board of Equalization, unless he or she has paid the use tax to
a retailer registered to collect the use tax.
   Existing law requires retailers, as specified, to register with,
and to obtain a seller's permit or certification of registration-use
tax from, the State Board of Equalization, and also requires
specified businesses to register with the board and to annually
report their use tax owed for the previous calendar year. For taxable
years beginning on January 1, 2003, and ending on December 31, 2009,
persons not otherwise registered with the board make an irrevocable
election to report qualified use tax, as defined, on that person's
income tax return. The Franchise Tax Board is required to revise the
income tax returns to allow a person to report and remit qualified
use taxes to it and to remit the qualified use taxes collected to the
board.
   This bill would continue the authorization for an eligible person
to make an irrevocable election to report qualified use tax, as
defined, on that person's income tax return, for taxable years ending
after December 31, 2009, and would require the Franchise Tax Board
to continue to allow a person to report and remit qualified use taxes
to it and to remit the qualified use taxes collected to the board.
   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 6452.1 of the Revenue and Taxation Code is
amended to read:
   6452.1.  (a) Notwithstanding Section 6451, every person that
purchases tangible personal property, the storage, use, or other
consumption of which is subject to qualified use tax, as defined in
subdivision  (b)   (d)  , that is otherwise
required to report and remit that tax pursuant to this part, may
elect to report and remit qualified use tax on an acceptable tax
return.
   (b) (1) A person that reports qualified use tax on an acceptable
tax return is deemed to have made the election authorized by this
section.
   (2) (A) In the case of a married individual filing a separate
California personal income tax return, an election may be made to
report either one-half of the qualified use tax or the entire
qualified use tax on his or her separate California personal income
tax return.
   (B) If an individual elects to report one-half of the qualified
use tax, that election will not be binding with respect to the
remaining one-half of the qualified use tax owed by that individual
and that individual's spouse.
   (c) An election to report qualified use tax on an acceptable tax
return shall be irrevocable. An acceptable tax return that contains
use tax shall be considered a tax return for purposes of this part.
   (d) For purposes of this section:
   (1) "Acceptable tax return" means a timely filed original return
that is filed pursuant to Article 1 (commencing with Section 18501),
Article 2 (commencing with Section 18601), Section 18633, Section
18633.5 of Chapter 2 (commencing with Section 18501) of Part 10.2, or
Article 3 (commencing with Section 23771) of Chapter 4 of Part 11.
   (2) (A) Except as provided in subparagraph (B), "qualified use tax"
means the use tax imposed under this part, Section 35 of Article
XIII of the California Constitution, the Bradley-Burns Uniform Local
Sales and Use Tax Law (Part 1.5 (commencing with Section 7200)), or
 in accordance with  the Transactions and Use Tax Law (Part
1.6 (commencing with Section 7251)) that has not been paid to a
retailer holding a seller's permit or certificate of registration-use
tax.
   (B) "Qualified use tax" does not include:
   (i) Use tax that applies to a mobilehome or a commercial coach
that is required to be registered annually pursuant to the Health and
Safety Code or use tax that applies to a vehicle subject to
identification under Division 16.5 (commencing with Section 38000) of
the Vehicle Code, or to a vehicle that qualifies under the permanent
trailer identification plate program pursuant to subdivision (a) of
Section 5014.1 of the Vehicle Code.
   (ii) Use tax imposed on a vehicle, vessel, or aircraft.
   (iii) Use tax imposed on a lessee of tangible personal property.
   (e) If a person elects to report qualified use tax on an
acceptable tax return, that person shall comply with all of the
following:
   (1) The qualified use tax shall be reported on and remitted with
an acceptable tax return.
   (2) The qualified use tax shall be reported on and remitted with
an acceptable tax return that is required to be filed for the taxable
year in which the liability for the qualified use tax was incurred.
   (f) (1) The penalties and interest imposed under this part, 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)) shall apply to use tax
reported as qualified use tax on an acceptable return.
   (2) Any claims for refunds or credits of any use tax reported as
qualified use tax on an acceptable tax return shall be made in
accordance with Chapter 7 (commencing with Section 6901) of this
part.
   (3) Qualified use tax shall be considered to be timely reported
and remitted for purposes of this part, the Bradley-Burns Uniform
Local Sales and Use Tax Law (Part 1.5 (commencing with Section
7200)), and the Transactions and Use Tax Law (Part 1.6 (commencing
with Section 7251)), if the qualified use tax is timely reported on
and remitted with an acceptable tax return in accordance with the
provisions of this section.
   (g) Notwithstanding a person's election to remit and to report
qualified use tax on an acceptable tax return, the State Board of
Equalization is not precluded from making any determinations for
understatements of qualified use tax against that person in
accordance with Part 5 (commencing with Section 6451).
   (h) Any payments and credits shown on the return, together with
any other credits associated with that person's account, of a person
that elects to report qualified use tax on an acceptable tax return
shall be applied in the following order:
   (1) Taxes imposed under Part 10 (commencing with Section 17001) or
Part 11 (commencing with Section 23001), including penalties and
interest, if any, imposed under Part 10.2 (commencing with Section
 18041)   18401)  .
   (2) Qualified use tax reported on the acceptable tax return in
accordance with this section.
   (i) (1) This section does not apply to a person who is otherwise
required to hold a seller's permit or to register with the State
Board of Equalization pursuant to Part 1 (commencing with Section
6001) of this division.
   (2) This section applies to purchases of tangible personal
property made on or after January 1, 2003, in taxable years beginning
on or after January 1, 2003 , and on or before December 31,
2009, and as of that date becomes inoperative, unless a later enacted
statute extends the operation of this section  . 
   (3) Notwithstanding this section becoming inoperative as described
in paragraph (2), any provisions in this section or Section 18510
relating to collection activities attributable to qualified use taxes
reported prior to the inoperative date of this section shall
continue in the same manner as if this section were still operative.

  SEC. 2.  Section 6453 of the Revenue and Taxation Code is amended
to read:
   6453.  For purposes of the sales tax, the return shall show the
gross receipts of the seller during the preceding reporting period
and, in the case of a person who is liable for the sales tax and is
not a seller, the gross receipts of such person for the period in
which the liability was incurred. For purposes of the use tax, in
case of a return filed by a retailer, the return shall show the total
sales price of the property sold by him or her, the storage, use, or
consumption of which property became subject to the use tax during
the preceding reporting period; in case of a return filed by a
purchaser,  except as provided in Section 6452.1,  the
return shall show the total sales price of the property purchased by
him or her, the storage, use, or consumption of which became subject
to the use tax during the preceding reporting period.
   The return shall also show the amount of the taxes for the period
covered by the return and any other information which the board deems
necessary for the proper administration of this part.
  SEC. 3.  Section 6487.3 of the Revenue and Taxation Code is amended
to read:
   6487.3.  (a) (1) For persons that elect to report qualified use
tax in accordance with Section 6452.1, except in the case of fraud,
intent to avoid this part or authorized rules and regulations issued
by the board, or the gross understatement of qualified use taxes,
every notice of a deficiency determination with respect to the
qualified use tax shall be mailed within three years after the last
day for which an acceptable tax return is due or filed, whichever
occurs later.
   (2) In the case of a gross understatement of qualified use tax,
every notice of a deficiency determination with respect to the
qualified use tax shall be mailed within six years after the last day
for which an acceptable tax return is due or filed, whichever occurs
later.
   (3) For purposes of this subdivision a "gross understatement of
qualified used tax" is a deficiency that is in excess of 25 percent
of the amount of qualified use tax reported on a person's acceptable
tax return. In the case of married individuals filing separate
California personal income tax returns, the total amount of qualified
use tax reported will be considered in determining whether there is
a gross understatement of qualified use tax.
   (4) For purposes of this section "acceptable tax return" means a
timely filed original return that is filed pursuant to Article 1
(commencing with Section 18501), Article 2 (commencing with Section
18601), Section 18633, Section 18633.5 of Chapter 2 (commencing with
Section 18501) of Part 10.2, or Article 3 (commencing with Section
23771) of Chapter 4 of Part 11.
   (b) This section applies to reporting of purchases of tangible
personal property made on or after January 1, 2003, in taxable years
beginning on or after January 1, 2003  , and on or before
December 31, 2009, and as of that latter date becomes inoperative,
unless a later enacted statute extends the operation of this section
 .
  SEC. 4.  Section 18510 of the Revenue and Taxation Code is amended
to read:
   18510.  (a) (1) The Franchise Tax Board shall revise the returns
required to be filed pursuant to this article, Article 2 (commencing
with Section 18601), Section 18633, Section 18633.5, and Article 3
(commencing with Section 23771) of Chapter 4 of Part 11 in a form and
manner approved by the State Board of Equalization, to allow a
person to report and pay qualified use tax in accordance with the
provisions of Section 6452.1.
   (2) Within 10 working days of receiving from the Franchise Tax
Board the returns described in paragraph (1), the State Board of
Equalization shall do either of the following:
   (A) Approve the form and manner of the returns and notify the
Franchise Tax Board of this approval.
   (B) Submit comments to the Franchise Tax Board regarding changes
to the returns that shall be incorporated before the State Board of
Equalization approves the form and manner of the returns.
   (b) Any payments and credits shown on the return, together with
any other credits associated with that person's account, of a person
that elects to report qualified use tax on an acceptable tax return
shall be applied in the following order:
   (1) Taxes imposed under Part 10 (commencing with Section 17001) or
Part 11 (commencing with Section 23001), including penalties and
interest, if any, imposed under this part.
   (2) Qualified use tax as reported on the acceptable tax return, in
accordance with Section 6452.1.
   (c) The Franchise Tax Board shall transfer the qualified use tax
received pursuant to Section 6452.1, and any information the State
Board of Equalization deems necessary for its administration of the
use tax, to the State Board of Equalization within 60 days from the
date the use tax is received or the acceptable tax return is
processed, whichever is later.
   (d) This section shall be operative for returns filed for taxable
years on and after January 1, 2003  , and ending on or before
December 31, 2009, and as of that date becomes inoperative, unless a
later enacted statute extends the operation of this section
 .