BILL ANALYSIS �
AB 155
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CONCURRENCE IN SENATE AMENDMENTS
AB 155 (Charles Calderon and Skinner)
As Amended September 9, 2011
2/3 vote. Urgency
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|ASSEMBLY: |52-20|(May 31, 2011) |SENATE: |36-1 |(September 9, |
| | | | | |2011) |
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Original Committee Reference: REV. & TAX.
SUMMARY : Repeals and reenacts the statutory provisions
specifying those retailers with a use tax collection duty (i.e.,
nexus).
The Senate amendments delete the Assembly version of this bill,
and instead:
1)Repeal Revenue and Taxation Code (R&TC) Section 6203, which
specifies those retailers that are considered to be engaged in
business in this state and that, as such, are required to
collect use tax on sales of tangible personal property (TPP)
to California consumers.
2)Enact two new versions of R&TC Section 6203. Specifically:
a) With the exception of minor stylistic changes, the first
version is identical to R&TC Section 6203, as it read
before being amended by AB 28 X1 (Blumenfield), Chapter 7,
Statutes of 2011-12 First Extraordinary Session ("Prior
Nexus Law"); and,
b) The second version is nearly identical to the current
version of R&TC Section 6203, but modifies the provisions
imposing a use tax collection duty on retailers that enter
into specified affiliate agreements. Currently, these
agreements only give rise to a collection duty if, among
other conditions, the remote retailer, within the preceding
12 months, has cumulative sales of TPP to California
purchasers in excess of $500,000. This version, in turn,
would increase this "safe harbor" to $1,000,000 ("Expanded
Nexus Law").
3)Provide that the Prior Nexus Law shall become operative on
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this bill's effective date.
4)Provide that the Expanded Nexus Law shall become operative
(and the Prior Nexus Law inoperative) on either of the
following dates:
a) January 1, 2013, if federal law is enacted on or before
July 31, 2012, authorizing the states to require sellers to
collect taxes on sales of goods to in-state purchasers
without regard to the seller's location, and the state does
not, on or before September 14, 2012, elect to implement
that law; or,
b) September 15, 2012, if such federal law is not enacted.
5)Specify that the provisions of the Expanded Nexus Law are
severable.
6)Require the Director of Finance, on or before August 15, 2012,
to certify in writing to the Governor, the Senate Committee on
Rules, the Speaker of the Assembly, and the State Board of
Equalization (BOE) whether or not federal law has been enacted
on or before July 31, 2012, authorizing states to require
remote sellers to collect taxes.
7)Provide that for the period between June 28, 2011, and this
bill's effective date, state law regarding the imposition and
collection of use taxes, shall be administered and applied in
accordance with state law as it read on June 27, 2011.
8)Provide that this bill is an urgency statute and shall go into
immediate effect.
9)Add one joint author and one principal coauthor.
EXISTING LAW imposes a:
1)Sales tax on retailers for the privilege of selling TPP,
absent a specific exemption. The tax is based upon the
retailer's gross receipts from TPP sales in this state.
2)Complementary use tax on the storage, use, or other
consumption in this state of TPP purchased from any retailer.
The use tax is imposed on the purchaser, and unless the
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purchaser pays the use tax to a retailer registered to collect
the California use tax, the purchaser remains liable for the
tax, unless the use is exempted. The use tax is set at the
same rate as the state's sales tax and must be remitted to the
BOE.
3)Use tax collection duty on any retailer entering into an
agreement or agreements under which a person or persons in
this state, for a commission or other consideration, directly
or indirectly refer potential purchasers of TPP to the
retailer, provided two specified conditions are met, including
the condition that the retailer, within the preceding 12
months, has cumulative sales of TPP to California purchasers
in excess of $500,000.
AS PASSED BY THE ASSEMBLY , this bill imposed a use tax
collection duty on any retailer that is a member of a commonly
controlled group, as defined, and is a member of a combined
reporting group, as defined, that includes another member of the
retailer's commonly controlled group that performs services in
this state in connection with TPP to be sold by the retailer.
FISCAL EFFECT : Unknown
COMMENTS : As passed by the Assembly on May 31, 2011, this bill
would have amended R&TC Section 6203 to include the "commonly
controlled group" nexus provisions outlined above. On June 28,
2011, however, Governor Brown signed into law AB 28 X1
(Blumenfield), Chapter 7, Statutes of 2011-12 First
Extraordinary Session, which, among other things, adopted these
provisions. AB 28 X1 also added provisions that impose a use
tax collection duty on remote retailers that enter into
specified "affiliate agreements."
In its current form, this bill temporarily reverts California's
use tax nexus laws to the way they read prior to being amended
by AB 28 X1. The Expanded Nexus Law, in turn, would go into
effect on either September 15, 2012, or January 1, 2013,
depending on whether or not the federal government acts to
authorize states to compel remote vendors to collect use taxes.
Analysis Prepared by : M. David Ruff / REV. & TAX. / (916)
319-2098
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FN: 0002901