BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 2688
                                                                  Page  1


          Date of Hearing:   May 2, 2012

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

            AB 2688 (Committee on Revenue and Taxation) - As Introduced:  
                                   March 12, 2012 

          Policy Committee:                              Revenue and 
          Taxation     Vote:                            9-0

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:              

           SUMMARY  

          As proposed to be amended, this bill makes three technical 
          changes to tax collection programs administered by the Board of 
          Equalization (BOE): 

          1)Provides that, for purposes of the sales and use tax (SUT) law 
            bad debt deduction and refund provisions, a proper claim shall 
            be established when an election form is prepared and signed.  

          2)Changes, from September 1 to October 1, the date by which the 
            BOE must annually adjust the monetary value threshold for bulk 
            sales of bullion and coins that qualify for a SUT exemption.

          3)Conform to changes implemented by AB 686 (Huffman), Chapter 
            176, Statutes of 2011, which decreased the rate at which a 
            city or county may levy, increase, or extend a transactions 
            and use tax (TUT) from 0.25% to a rate of 0.125% (or multiples 
            thereof).  

           FISCAL EFFECT  

          According to BOE, the administrative costs are minor and 
          absorbable.  Negligible impact on state revenues. 

           COMMENTS  

           1)Background:

             a)   Bullion and coins  .  BOE must adjust annually for 








                                                                  AB 2688
                                                                  Page  2

               inflation the sales and use tax exemption for bulk precious 
               metals.  BOE reports that since the inflation factor 
               adjustment is not available until late August it is often 
               difficult to obtain accurate preliminary numbers to 
               determine the adjustment by September 1 of each year.  

             b)   TUT.   This provisions would conform to AB 686 (Huffman), 
               Chapter 176, Statutes of 2011, which decreased the rate at 
               which a city or county may levy, increase, or extend a TUT 
               from 0.25% to a rate of 0.125%, or multiples thereof.  

             c)   Erroneous charges  .  This proposal grants the BOE the 
               ability to reimburse taxpayers for charges that are a 
               direct result of BOE error.  
           
           2)Amendments.   The author proposes amendments, specifically 
            amending out the provisions of the bill related to worthless 
            accounts, Section 1 of the bill, Section 6055 of the Revenue 
            and Taxation Code.

           3)There is no registered opposition to this bill.  
           


          Analysis Prepared by  :    Roger Dunstan / APPR. / (916) 319-2081