AB 2114, as introduced, Garcia. Taxation: qualified heavy equipment.
The California Constitution authorizes the Legislature to classify personal property for differential taxation or for exemption by means of a statute approved by a 2⁄3 vote of the membership of each house.
This bill would, pursuant to this constitutional authorization, impose a tax on every qualified rentee of qualified heavy equipment for the privilege of renting qualified heavy equipment in this state at the rate of .75% of the gross receipts of the rental price from the renting of qualified heavy equipment. This bill would require a qualified renter to collect the tax from the qualified rentee at the time of rental, as provided. This bill would provide that this tax shall be in lieu of any personal property tax on qualified heavy equipment. This bill would require the tax to be administered by the State Board of Equalization and to be collected pursuant to the procedures set forth in the Fee Collection Procedures Law. This bill would require all revenues, interest, penalties, and other amounts, less refunds and the board’s costs of administration, derived from the imposition of the tax to be deposited in the General Fund.
Existing property tax law requires the county auditor, in each fiscal year, to allocate property tax revenue to local jurisdictions in accordance with specified formulas and procedures, and generally requires that each jurisdiction be allocated an amount equal to the total of the amount of revenue allocated to that jurisdiction in the prior fiscal year, subject to certain modifications, and that jurisdiction’s portion of the annual tax increment, as defined. Existing property tax law also reduces the amounts of ad valorem property tax revenue that would otherwise be annually allocated to the county, cities, and special districts pursuant to these general allocation requirements by requiring, for purposes of determining property tax revenue allocations in each county for the 1992-93 and 1993-94 fiscal years, that the amounts of property tax revenue deemed allocated in the prior fiscal year to the county, cities, and special districts be reduced in accordance with certain formulas. It requires that the revenues not allocated to the county, cities, and special districts as a result of these reductions be transferred to the Educational Revenue Augmentation Fund in that county for allocation to school districts, community college districts, and the county office of education.
This bill would, for the 2015-16 fiscal year and for each fiscal year thereafter, require the county auditor to increase the total amount of ad valorem property tax revenue that is otherwise required to be allocated among the county and each city and special district in the county by the qualified heavy equipment reimbursement amount, as defined, and to commensurately decrease the amount of ad valorem property tax revenue that is otherwise required to be allocated to the county Educational Revenue Augmentation Fund by the qualified heavy equipment reimbursement amount.
By expanding the application of the Fee Collection Procedures Law, the violation of which is a crime, and by imposing new duties upon local officials in the allocation of ad valorem property tax revenues, this bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that with regard to certain mandates no reimbursement is required by this act for a specified reason.
With regard to any other mandates, this bill would provide that, if the Commission on State Mandates determines that the bill contains costs so mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
Section 2229 of the Revenue and Taxation Code requires the Legislature to reimburse local agencies annually for certain property tax revenues lost as a result of any exemption or classification of property for purposes of ad valorem property taxation.
This bill would provide that, notwithstanding Section 2229 of the Revenue and Taxation Code, no appropriation is made and the state shall not reimburse local agencies for property tax revenues lost by them pursuant to the bill.
Vote: 2⁄3. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.
The people of the State of California do enact as follows:
Section 97.83 is added to the Revenue and
2Taxation Code, to read:
(a) Notwithstanding any other law, for the 2015-16
4fiscal year and for each fiscal year thereafter, the auditor of each
5county shall do both of the following:
6(1) Increase the total amount of ad valorem property tax revenue
7that is otherwise required to be allocated among the county and
8each city and special district in the county by the qualified heavy
9equipment reimbursement amount. The qualified heavy equipment
10reimbursement amount shall be allocated among the county, cities,
11and special districts in proportion to the amounts of ad valorem
12property tax revenue otherwise allocated among those local
13agencies.
14(2) Decrease the total amount of ad valorem property tax revenue
15that is
otherwise required to be allocated to the county’s
16Educational Revenue Augmentation Fund by the qualified heavy
17equipment reimbursement amount.
18(b) For purposes of this section, “qualified heavy equipment
19reimbursement amount” means the total amount of ad valorem
20property tax revenue lost by the county and each city and special
21district in the county as a result of the in-lieu tax imposed upon
22qualified heavy equipment pursuant to Part 11 (commencing with
23Section 5500).
24(c) For the 2016-17 fiscal year and for each fiscal year
25thereafter, ad valorem property tax revenue allocations made
26pursuant to Sections 96.1 and 96.5, or any successor to either of
27those provisions, shall not incorporate the allocation adjustments
28made by this section.
Part 11 (commencing with Section 5500) is added to
2Division 1 of the Revenue and Taxation Code, to read:
3
For purposes of this part, all of the following definitions
7shall apply:
8(a) “Rental price” means the total amount of the charge for
9renting the qualified rental equipment, excluding any separately
10stated charges that are not rental charges, including but not limited
11to, separately stated charges for delivery and pickup fees, damage
12waivers, environmental mitigation fees, or use taxes.
13(b) “Local entity” means a city, county, and special district.
14(c) (1) “Qualified heavy equipment” means construction,
15earthmoving, or industrial equipment that is mobile, including
16attachments for the equipment, including, but not
limited to, all of
17the following:
18(A) A self-propelled vehicle that is not designed to be driven
19on the highway.
20(B) Industrial electrical generation equipment.
21(C) Industrial lift equipment.
22(D) Industrial material equipment.
23(E) Equipment used in shoring, shielding, and ground trenching.
24(2) Qualified heavy equipment is mobile if the qualified heavy
25equipment is not intended to be permanently affixed to real
26property for the purpose of using the qualified heavy equipment
27for its intended use. Qualified heavy equipment is mobile if it is
28intended to be moved among worksites as needed.
29(d) “Qualified rentee” means a rentee that rents qualified heavy
30equipment from a qualified renter.
31(e) “Qualified renter” means a renter that satisfies all of the
32following:
33(1) The principal business of the renter is the short-term rental
34of qualified heavy equipment.
35(2) Is engaged in a line of business described in Code 532412
36of the North American Industry Classification System published
37by the United States Office of Management and Budget, 2012
38edition.
39(f) “Renting” or “rent” means a rental for a period of less than
40365 days or for an undefined period.
(a) There is hereby imposed a tax on every qualified
2rentee of qualified heavy equipment for the privilege of renting
3qualified heavy equipment in this state at the rate of .75 percent
4of the rental price from the renting of qualified heavy equipment.
5(b) (1) The qualified renter shall collect the tax from the
6qualified rentee at the time of rental and remit the tax to the board
7as required by this part. Any amount unreturned to the qualified
8rentee who paid an amount in excess of the tax, but was collected
9from the qualified rentee under the representation by the qualified
10renter that it was owed as tax, constitutes debts owed by the
11qualified renter to this state.
12(2) Every qualified rentee who rents qualified heavy equipment
13in this state is liable for the tax until it has been paid to this state,
14except that payment to a qualified renter relieves the qualified
15rentee from further liability for the tax. Any tax collected from a
16qualified rentee that has not been remitted to the board shall be a
17debt owed to the state by the qualified renter required to collect
18and remit the tax. Nothing in this part shall impose any obligation
19upon a qualified renter to take any legal action to enforce the
20collection of the tax imposed by this part.
21(c) The qualified renter shall separately state the amount of the
22tax imposed under this section on any contract, receipt, invoice,
23or other similar document given by the qualified renter to the
24qualified rentee at the time of rental.
25(d) The board shall administer and collect the tax imposed by
26
this part pursuant to the Fee Collection Procedures Law (Part 30
27(commencing with Section 55001) of Division 2). For purposes
28of this part, the references in the Fee Collection Procedures Law
29to “fee” shall include the tax imposed by this part, and references
30to “feepayer” shall include a person liable for the payment of the
31taxes imposed by this part and collected pursuant to that law.
Every qualified renter required to collect the tax imposed
33under this part shall register with the board. Every application for
34registration shall be made upon a form prescribed by the board
35and shall set forth the name under which the applicant transacts
36or intends to transact business, the location of its place or places
37of business, and other information as the board may require. An
38application for an account shall be authenticated in a form or
39pursuant to methods as may be prescribed by the board.
The board may prescribe, adopt, and enforce regulations
2relating to the administration and enforcement of this part,
3including, but not limited to, collections, reporting, refunds, and
4appeals.
The taxes imposed by this part are due and payable to
6the board quarterly on or before the last day of the month next
7succeeding each quarterly period.
(a) On or before the last day of the month following
9each quarterly period of three months, a return for the preceding
10quarterly period shall be filed using electronic media with the
11board.
12(b) The board may prescribe those forms and reporting
13requirements as are necessary to implement the tax.
14(c) Returns shall be authenticated in a form or pursuant to
15methods as may be prescribed by the board.
All revenues, interest, penalties, and other amounts
17collected pursuant to this part, less refunds and the board’s costs
18of administration, shall be deposited in the General Fund.
(a) For the 2015-16 fiscal year and for each fiscal year
20thereafter, the tax imposed pursuant to this part shall be in lieu of
21any property tax on qualified heavy equipment subject to taxation
22pursuant to this part.
23(b) Qualified heavy equipment of a business that is not for rent
24shall remain subject to any applicable property taxes.
This part shall not apply to any rental contract for
26qualified heavy equipment that was entered into before the
27operative date of the act adding this section.
No reimbursement is required by this act pursuant to
29Section 6 of Article XIII B of the California Constitution for certain
30costs that may be incurred by a local agency or school district
31because, in that regard, this act creates a new crime or infraction,
32eliminates a crime or infraction, or changes the penalty for a crime
33or infraction, within the meaning of Section 17556 of the
34Government Code, or changes the definition of a crime within the
35meaning of Section 6 of Article XIII B of the California
36Constitution.
37However, if the Commission on State Mandates determines that
38this act contains other costs mandated by the state, reimbursement
39to local agencies and school districts for those costs
shall be made
P7 1pursuant to Part 7 (commencing with Section 17500) of Division
24 of Title 2 of the Government Code.
Notwithstanding Section 2229 of the Revenue and
4Taxation Code, no appropriation is made by this act and the state
5shall not reimburse any local agency for any property tax revenues
6lost by it pursuant to this act.
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