BILL NUMBER: SB 1373	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Leno

                        FEBRUARY 19, 2010

   An act to add Section 6007.7 to the Revenue and Taxation Code,
relating to taxation, to take effect immediately, tax levy.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1373, as introduced, Leno. Sales and use taxes: retailer:
paving construction contractor.
   (1) The Sales and Use Tax Law imposes 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.
A construction contractor generally does not sell materials to his
or her customer, but instead uses the materials in furnishing and
installing the materials in the performance of a construction
contract, with either sales tax applying to the sale of materials to
the construction contractor, or if sales tax does not apply, use tax
applying to the storage, use, or other consumption of the materials
by the construction contractor.
   This bill would exclude from tax, the sale of materials to, or the
storage, use, or other consumption of materials by, a paving
construction contractor, and instead deem a paving construction
contractor the retailer of the materials he or she furnishes and
installs in the performance of a paving construction contract, and
would specify how the gross receipts from the retail sale are
determined.
   (2) 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 conformity with the Transactions and Use Tax Law, which
conforms to the Sales and Use Tax Law. Exemptions from 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 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.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


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

  SECTION 1.  Section 6007.7 is added to the Revenue and Taxation
Code, to read:
   6007.7.  (a) A contractor that fabricates, manufactures,
processes, or produces materials that he or she furnishes and
installs in the performance of a paving construction contract shall
be deemed the retailer of those materials. The gross receipts from
the retail sale of the materials shall be included in the measure of
the taxes imposed by this part.
   (b) For purposes of this section, a "paving construction contract"
means a construction contract to erect, construct, alter, or repair
streets, highways, sidewalks, driveways, curbs, gutters, parking
lots, or other similar structures.
   (c) For purposes of this section, the gross receipts from the sale
of the materials shall be as follows:
   (1) The price at which the contractor sells similar materials in
similar quantities ready for installation to other contractors.
   (2) If the contractor does not sell similar materials in similar
quantities ready for installation to other contractors, the price
shall be deemed to be the amount stated in the price lists, bid
sheets, or other records of the contractor.
  SEC. 2.  This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.