BILL ANALYSIS �
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UNFINISHED BUSINESS
Bill No: SB 805
Author: Senate Veterans Affairs Committee
Amended: 6/20/11
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 9-0, 4/27/11
AYES: Wolk, Huff, DeSaulnier, Fuller, Hancock, Hernandez,
Kehoe, La Malfa, Liu
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 76-0, 7/14/11 (Consent) - See last page
for vote
SUBJECT : Sales and use taxes: consumers: veterans:
itinerant vendors
SOURCE : State Board of Equalization
DIGEST : This bill extends the January 1, 2012 sunset to
January 1, 2022, so that qualified itinerant veteran
vendors would remain consumers indefinitely with respect to
tangible personal property they sell for $100 or less under
the specified conditions.
Assembly Amendments extend rather than delete the sunset
date.
ANALYSIS : Current state law imposes the sales and use
tax on the gross receipts on tangible personal property
CONTINUED
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unless statutorily exempted. The law does not contain a
general sale and use tax exemption for products sold by
veterans.
Current law, with respect to certain veterans that sell
goods, provides that until January 1, 2012, a "qualified
itinerant vendor" is a consumer of tangible personal
property owned and sold by the qualified itinerant vendor,
except alcoholic beverages and tangible personal property
sold for more than $100.
This provision specifies that a person is a "qualified
itinerant vendor" when all of the following apply:
1. The person was a member of the United States Armed
Forces, who received an honorable discharge or a release
from active duty under honorable conditions from
service.
2. The person is unable to obtain a livelihood by manual
labor due to a service-connected disability.
3. For the purposes of selling tangible personal property,
the person is a sole proprietor with no employees.
4. The person has no permanent place of business in this
state.
The law also defines "permanent place of business" as any
building or other permanently affixed structure, including
a residence that is used in whole or in part for the
purpose of making sales of, or taking orders and arranging
for shipment of, tangible personal property, and excludes
from that term, any building or other permanently affixed
structure, including a residence, used for any of the
following:
1. The storage of tangible personal property.
2. The cleaning or the storage of equipment or other
property used in connection with the manufacture or sale
of tangible personal property.
These provisions, however, do not apply to caterers or
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vending machine operators.
This bill extends the January 1, 2012 sunset to January 1,
2022, so that qualified itinerant veteran vendors would
remain "consumers" indefinitely with respect to tangible
personal property they sell for $100 or less under the
specified conditions.
This bill becomes effective immediately.
Comments
This bill is sponsored by the Board of Equalization (BOE)
in order to enable qualifying veterans to retain their
consumer status with respect to their itinerant sales.
This provision represents one small step towards
recognizing our disabled veterans who have already made, or
are making the transition from military to civilian
employment, and it should not be allowed to sunset. This
provision assists in this transition by simplifying
reporting requirements under the Sales and Use Tax Law for
those qualifying disabled veterans that are honorably
discharged or released from service that desire to engage
in the business of selling goods they own. For qualifying
disabled veterans without employees or a permanent place of
business, this provision eliminates the need for them to
hold a seller's permit, file sales tax returns, and remit
sales tax on their sales.
SB 809 (Senate Veteran's Affairs Committee), Chapter 621,
Statutes of 2009, added this exemption and became operative
on April 1, 2009. The bill passed the Legislature
unanimously. For several years prior to the enactment of
SB 809, veterans argued that they qualified for a sales and
use tax exemption under a Business and Professions Code
section which exempts honorably discharged veterans from
locally-imposed license taxes and fees. Veterans groups
argued that they were specifically exempt from the
application of the sales and use tax on sales of food
products and carbonated beverages from a mobile food cart.
According to the courts and Legislative Counsel, that law
did not exempt qualified veterans from the sales and use
tax which prompted the need for additional legislation.
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FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the BOE, this bill will result in an annual
state and local revenue loss of about $22,000.
SUPPORT : (Verified 7/18/11)
State Board of Equalization (source)
ARGUMENTS IN SUPPORT : These provisions apply to a small
group of itinerant disabled veteran vendors, and if the
sunset date were not repealed, the BOE argues that it
creates an administrative burden on them because it has to
re-register these individuals, re-issue a seller's permit
to them, and ensures that they are in compliance with the
law.
ASSEMBLY FLOOR : 76-0, 7/14/11
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,
Galgiani, Gatto, Gordon, Grove, Hagman, Halderman, Hall,
Harkey, Hayashi, Roger Hern�ndez, Hill, Huber, Hueso,
Huffman, Jeffries, Jones, Knight, Lara, Logue, Bonnie
Lowenthal, Ma, Mansoor, Mendoza, Miller, 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: Beth Gaines, Garrick, Gorell, Mitchell
AGB:do 7/18/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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