BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 2031|
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CONSENT
Bill No: AB 2031
Author: Dahle (R)
Amended: 5/6/14 in Assembly
Vote: 21
SENATE NATURAL RESOURCES AND WATER COMMITTEE : 9-0, 6/24/14
AYES: Pavley, Cannella, Evans, Fuller, Hueso, Jackson, Lara,
Monning, Wolk
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 72-1, 5/19/14 - See last page for vote
SUBJECT : Forest resources: timber assessment
SOURCE : Author
DIGEST : This bill relieves retailers with sales of qualified
lumber and engineered wood products of less than $25,000 during
the previous calendar year from liability to collect the Lumber
Products Assessment (LPA) and to report to the State Board of
Equalization (BOE).
ANALYSIS :
Existing law:
1. Imposes a sales tax on retailers for the privilege of selling
tangible personal property (TPP), absent a specific
exemption. The tax is based upon the retailer's gross
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receipts from TPP sales in this state.
2. Imposes a 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
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. Imposes an LPA at the rate of 1% on a purchaser of lumber
products and engineered wood products to be collected by the
retailer at the time of sale. Applies to sales occurring on
or after January 1, 2013.
4. Defines a "retailer" by reference to Revenue and Taxation
Code Section 6015 as:
A. Every seller who makes any retail sale or sales of
TPP, and every person engaged in the business of making
retail sales at auction of TPP owned by the person or
others.
B. Every person engaged in the business of making sales
for storage, use, or other consumption or in the
business of making sales at auction of TPP owned by the
person or others for storage, use, or other
consumption.
C. Any person conducting a race meeting under Chapter 4
of Division 8 of the Business and Professions Code,
with respect to horses which are claimed during such
meeting.
5. Provides that the LPA is due and payable to the BOE quarterly
on or before the last day of the month next succeeding each
quarterly period and requires a retailer to file a return
with the BOE on or before the last day of the month following
each quarterly period, as prescribed by the BOE.
6. Does not provide any type of exemption from the collection of
the LPA for otherwise qualified retailers that have few or no
sales of lumber products or engineering wood. These
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retailers must file zero or small dollar returns.
This bill:
1. Excludes from the definition of a "retailer" a retailer with
de minimis sales of qualified lumber products and engineered
wood products of less than $25,000 during the previous
calendar year.
2. Requires retailers with de minimis sales to notify their
customers who purchase qualified lumber or engineered wood
products of their obligation to remit the LPA directly to the
BOE.
3. Clarifies that the references to "feepayer" under the Fee
Collection Procedures Law shall include a person required to
pay the LPA, which includes the retailer.
Background
In 2012, California established a new assessment on the sales of
lumber products and engineered wood products at a rate of 1% of
gross receipts to be paid by purchasers and remitted to the BOE
by lumber retailers. The assessment was one of the provisions in
AB 1492 (Assembly Budget Committee, Chapter 289, Statutes of
2012) that were proposed by the timber industry and incorporated
by the Governor in the May Revise that also included changes to
the state's wildfire liability laws, and extended the duration
of timber harvest plans (THPs). The funds are available upon
appropriation for the environmental review of THPs by state
agencies, for environmental restoration grants in watersheds
adversely affected by timber production, and for grants to
various entities for wildfire prevention.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/4/14)
State Board of Equalization
California Retailers Association
California Forestry Association
CalTax
George Runner, BOE member
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Humboldt Redwood Company
Mendocino Redwood Company
ARGUMENTS IN SUPPORT : According to the author's office, this
bill is needed to provide relief to small sellers of lumber
products by eliminating the expense of collecting and reporting
the LPA. Regardless of whether a retailer has $0.01 or $100,000
in annual sales of qualified lumber products, they are required
to register with the BOE and report the LPA on all those sales.
This bill exempts retailers with de minimis annual sales of
qualified lumber products and engineered wood products of less
than $25,000 from the obligation to collect the LPA fee and
report to the BOE. However, purchasers will still be required
to report the LPA on these products directly to the BOE.
ASSEMBLY FLOOR : 72-1, 5/19/14
AYES: Achadjian, Alejo, Allen, Bigelow, Bloom, Bocanegra,
Bonilla, Bonta, Bradford, Brown, Buchanan, Ian Calderon,
Campos, Chau, Ch�vez, Chesbro, Conway, Cooley, Dababneh,
Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox, Frazier,
Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gorell,
Gray, Grove, Hagman, Hall, Harkey, Roger Hern�ndez, Holden,
Jones, Jones-Sawyer, Levine, Linder, Logue, Lowenthal,
Maienschein, Medina, Melendez, Mullin, Muratsuchi, Olsen, Pan,
Patterson, Perea, John A. P�rez, V. Manuel P�rez, Quirk,
Quirk-Silva, Rendon, Rodriguez, Salas, Skinner, Stone, Wagner,
Waldron, Weber, Wieckowski, Wilk, Williams, Atkins
NOES: Ting
NO VOTE RECORDED: Ammiano, Mansoor, Nazarian, Nestande,
Ridley-Thomas, Yamada, Vacancy
RM:d 8/4/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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