BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 289|
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THIRD READING
Bill No: AB 289
Author: Cedillo (D)
Amended: 5/24/11 in Assembly
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 9-0, 6/29/11
AYES: Wolk, Huff, DeSaulnier, Fuller, Hancock, Hernandez,
Kehoe,
La Malfa, Liu
SENATE APPROPRIATIONS COMMITTEE : 9-0, 8/25/11
AYES: Kehoe, Walters, Alquist, Emmerson, Lieu, Pavley,
Price, Runner, Steinberg
ASSEMBLY FLOOR : 79-0, 5/31/11 - See last page for vote
SUBJECT : Sales and use taxes: exemption: charitable
thrift stores
SOURCE : State Board of Equalization
DIGEST : This bill extends the sunset date until January
1, 2019 for the current sales and use tax exemption for
retail items sold by thrift stores operated by nonprofit
organizations to assist individuals with human
immunodeficiency virus or acquired immune deficiency
syndrome.
ANALYSIS : Existing law imposes a sales tax on retailers
for the privilege of selling tangible personal property.
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AB 289
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The tax is based upon the retailer's gross receipts from
sales in this state. Existing law imposes a complementary
use tax on the storage, use, or other consumption in this
state of tangible personal property purchased from any
retailer. The use tax is imposed on the purchaser, and
unless the 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 State Board of Equalization
(BOE).
State law provides a sales and use tax exemption for used
pieces of clothing, household items, or other retail items
sold by specified thrift stores operated by a "nonprofit
organization." To qualify for the exemption, the thrift
store's purpose must be to generate revenue for the funding
of medical, hospice, or social services for chronically ill
individuals, and at least 75 percent of the thrift store's
net income must be so used. Existing law defines a
"nonprofit organization," for purposes of the exemption, as
a nonprofit organization that provides medical, hospice, or
social services to individuals with a chronic,
life-threatening illness, including human immunodeficiency
virus (HIV) disease or acquired immune deficiency syndrome
(AIDS).
This bill repeals the current January 1, 2012 sunset date
for the current sales and use tax exemption for retail
items sold by thrift stores operated by nonprofit
organizations to assist individuals with HIV or AIDS and
extends it to January 1, 2019.
This bill provides that the state shall not reimburse any
local agency for lost sales and use tax revenues.
Comments
The author introduced this bill because the sales and use
tax exemption will expire on January 1, 2012 and this bill
extends that sunset to January 1, 2019 so that services may
still be provided to chronically ill patients regardless of
their ability to pay.
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FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13
2013-14 Fund
SUT revenue loss $246 $492
$492 General
$16 $31
$31 Special*
$192 $383
$383 Local**
$54 $108
$108 District
* State Fiscal Recovery Fund
** Includes 2011-12 Budget Act shift of 1.0625% from
General Fund portion to the Local Revenue Fund of 2011
for public safety realignment purposes.
SUPPORT : (Verified 8/26/11)
State Board of Equalization (source)
AIDS Healthcare Foundation
California Communities Untied Institute
California Hospice and Palliative Care Association
California Catholic Conference
Goodwill Industries
OPPOSITION : (Verified 8/26/11)
Department of Finance
ASSEMBLY FLOOR : 79-0, 5/31/11
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson,
Donnelly, Eng, Feuer, Fletcher, Fong, Fuentes, Furutani,
Beth Gaines, Galgiani, Garrick, Gatto, Gordon, Grove,
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AB 289
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Hagman, Halderman, Hall, Harkey, Hayashi, Roger
Hern�ndez, Hill, Huber, Hueso, Huffman, Jeffries, Jones,
Knight, Lara, Logue, Bonnie Lowenthal, Ma, Mansoor,
Mendoza, Miller, Mitchell, Monning, Morrell, Nestande,
Nielsen, Norby, Olsen, Pan, Perea, V. Manuel P�rez,
Portantino, Silva, Skinner, Smyth, Solorio, Swanson,
Torres, Valadao, Wagner, Wieckowski, Williams, Yamada,
John A. P�rez
NO VOTE RECORDED: Gorell
AGB:kc 8/26/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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