AB 2114, as amended, Pan. 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 qualifiedbegin delete rentee of qualified heavy equipmentend deletebegin insert renterend insert 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 tobegin delete collect the tax from the qualified rentee at the time of rentalend deletebegin insert end insertbegin insertpay and remit the taxend insert, 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 and, if necessary, the amount of those revenue otherwise required to be allocated to school districts, as specified, 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) (1) 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(A) 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(B) Decrease the total amount of ad valorem property tax
15revenue that is otherwise required to be allocated to the county’s
16Educational Revenue Augmentation Fund by the qualified heavy
17equipment reimbursement amount.
18(2) (A) In the event that the county’s Educational Revenue
19Augmentation Fund does not have sufficient funds to offset the
20qualified heavy equipment reimbursement amount, the auditor
21shall, to the extent that those funds are insufficient, decrease the
22total amount of ad valorem property tax that is allocated to local
23school districts providing instruction for kindergarten and grades
P4 11 to 12, inclusive, that are excess tax school entities, in proportion
2to their allocations of ad valorem property tax revenue allocated
3to school districts providing
instruction for kindergarten and grades
41 to 12, inclusive, in the county, and allocate that amount among
5the county, cities, and special districts in proportion to the amounts
6of ad valorem property tax revenues otherwise allocated among
7those local agencies.
8(B) In the event that the amount of ad valorem property tax
9revenues allocated to the Educational Revenue Augmentation
10Fund, together with the allocations to those school districts
11providing instruction for kindergarten and grades 1 to 12, inclusive,
12that are basic aid school districts, is insufficient to offset the
13qualified heavy equipment reimbursement amount, the auditor
14may also decrease the amount of ad valorem property tax revenues
15allocated to school districts providing instruction for kindergarten
16and grades 1 to 12, inclusive, that are not excess tax school entities,
17and
allocate that amount among the county, cities, and special
18districts in proportion to the amounts of ad valorem property tax
19revenue otherwise allocated among those local agencies.
20(b) For purposes of this section, “qualified heavy equipment
21reimbursement amount” means the total amount of ad valorem
22property tax revenue received by the county and each city and
23special district in the county
in the 2013-14 fiscal year from renters
24of qualified heavy equipment, as defined in Part 11 (commencing
25with Section 5500) of Division 2.
26(c) For the 2016-17 fiscal year and for each fiscal year
27thereafter, ad valorem property tax revenue allocations made
28pursuant to Sections 96.1 and 96.5, or any successor to either of
29those provisions, shall not incorporate the allocation adjustments
30made by this section.
Part 11 (commencing with Section 5500) is added to
32Division 1 of the Revenue and Taxation Code, to read:
33
For purposes of this part, all of the following definitions
37shall apply:
38(a) “Rental price” means the total amount of the charge for
39renting the qualifiedbegin delete rentalend deletebegin insert heavyend insert equipment, excluding any
40separately stated charges that are not rental charges, including, but
P5 1not limited to, separately stated charges for delivery and pickup
2fees, damage waivers, environmental mitigation fees, or use taxes.
3(b) “Local entity” means a city, county, and special district.
end delete4(c)
end delete
5begin insert(b)end insert (1) “Qualified heavy equipment” meansbegin insert anyend insert construction,
6earthmoving, or industrial equipment that is mobilebegin insert rented by a
7qualified renterend insert, including attachments for the equipmentbegin insert or other
8ancillary equipmentend insert, including, but not limited to, all of the
9following:
10(A) A self-propelled vehicle that is not designed to be driven
11on the highway.
12(B) Industrial electrical generation equipment.
13(C) Industrial lift equipment.
14(D) Industrial material equipment.
15(E) Equipment used in shoring, shielding, and ground trenching.
begin insert
16(F) Equipment or vehicles not subject to the fee imposed
17pursuant to the Vehicle License Fee Law (Part 5 (commencing
18with Section 10701) of Division 2).
19(2) Qualified heavy equipment is mobile if the qualified heavy
20equipment is not intended to be permanently affixed to real
21property for the purpose of using the qualified heavy equipment
22for
its intended use. Qualified heavy equipment is mobile if it is
23intended to be moved among worksites as needed.
24(d) “Qualified rentee” means a rentee that rents qualified heavy
25equipment from a qualified renter. “Qualified rentee” does not
26include a qualified renter who rents from another qualified renter.
27(e)
end delete
28begin insert(c)end insert “Qualified renter” means a renter that satisfies all of the
29 following:
30(1) The principal
business of the renter is the short-term rental
31of qualified heavy equipment.
32(2) Is engaged in a line of business described in Code 532412
33of the North American Industry Classification System published
34by the United States Office of Management and Budget, 2012
35edition.
36(f)
end delete
37begin insert(d)end insert “Renting” or “rent” means a rental for a period of less than
38365 days or for an undefined period.
(a) begin deleteThere end deletebegin insertOn and after July 1, 2015, there end insertis hereby
40imposed a tax on every qualifiedbegin delete rentee of qualified heavy begin insert renterend insert for the privilege of renting qualified heavy
P6 1equipmentend delete
2equipment in this state at the rate of .75 percent of the rental price
3from the renting of qualified heavy equipment.
4(b) (1) The qualified renter shall collect the tax from the
5qualified rentee at the time of rental and remit the tax to the board
6as required by this part. Any amount unreturned to the qualified
7rentee who paid an amount in excess of the tax, but was collected
8from the qualified rentee under the representation by the qualified
9renter that it was owed as tax, constitutes debts owed by the
10qualified renter to
this state.
11(2) Every qualified rentee who rents qualified heavy equipment
12in this state is liable for the tax until it has been paid to this state,
13except that payment to a qualified renter relieves the qualified
14rentee from further liability for the tax. Any tax collected from a
15qualified rentee that has not been remitted to the board shall be a
16debt owed to the state by the qualified renter required to collect
17and remit the tax. This part shall not impose any obligation upon
18a qualified renter to take any legal action to enforce the collection
19of the tax imposed by this part.
20(c) The qualified renter shall separately state the amount of the
21tax imposed under this section on any contract, receipt, invoice,
22or other similar document given by the qualified renter to the
23qualified
rentee at the time of rental.
24(b) The qualified renter shall pay and remit the tax to the board
25as required by this part.
26(d)
end delete
27begin insert(c)end insert The board shall administer and collect the tax imposed by
28
this part pursuant to the Fee Collection Procedures Law (Part 30
29(commencing with Section 55001) of Division 2). For purposes
30of this part, the references in the Fee Collection Procedures Law
31to “fee” shall include the tax imposed by this part, and references
32to “feepayer” shall include a person liable for the payment of the
33taxes imposed by this part and collected pursuant to that law.
Every qualified renterbegin delete required to collect the tax imposed shall register with the board. Every application for
35under this partend delete
36registration shall be made upon a form prescribed by the board
37and shall set forth the name under which the applicant transacts
38or intends to transact business, the location of its place or places
39of business, and other information as the board may require. An
P7 1application for an account shall be authenticated in a form or
2pursuant to methods as may be prescribed by the board.
The board may prescribe, adopt, and enforce regulations
4relating to the administration and enforcement of this part,
5including, but not limited to, collections, reporting, refunds, and
6appeals.
The taxes imposed by this part are due and payable to
8the board quarterly on or before the last day of the month next
9succeeding each quarterly period.
(a) On or before the last day of the month following
11each quarterly period of three months, a return for the preceding
12quarterly period shall be filed using electronic media with the
13board.
14(b) The board may prescribe those forms and reporting
15requirements as are necessary to implement the tax.
16(c) Returns shall be authenticated in a form or pursuant to
17methods as may be prescribed by the board.
All revenues, interest, penalties, and other amounts
19collected pursuant to this part, less refunds and the board’s costs
20of administration, shall be deposited in the General Fund.
(a) For the 2015-16 fiscal year and for each fiscal year
22thereafter, the tax imposed pursuant to this part shall be in lieu of
23any property tax on qualified heavy equipment subject to taxation
24pursuant to this part.
25(b) Qualified heavy equipment of a business that is not for rent
26shall remain subject to any applicable property taxes.
This part shall not apply to any rental contract for
28qualified heavy equipment that was entered into before the
29operative date of the act adding this section.
No reimbursement is required by this act pursuant to
31Section 6 of Article XIII B of the California Constitution for certain
32costs that may be incurred by a local agency or school district
33because, in that regard, this act creates a new crime or infraction,
34eliminates a crime or infraction, or changes the penalty for a crime
35or infraction, within the meaning of Section 17556 of the
36Government Code, or changes the definition of a crime within the
37meaning of Section 6 of Article XIII B of the California
38Constitution.
39However, if the Commission on State Mandates determines that
40this act contains other costs
mandated by the state, reimbursement
P8 1to local agencies and school districts for those costs shall be made
2pursuant to Part 7 (commencing with Section 17500) of Division
34 of Title 2 of the Government Code.
Notwithstanding Section 2229 of the Revenue and
5Taxation Code, no appropriation is made by this act and the state
6shall not reimburse any local agency for any property tax revenues
7lost by it pursuant to this act.
O
96