AB 2691, as introduced, Harkey. Sales and use taxes: wireless communication devices: bundled transactions.
The Sales and Use Tax Law imposes a tax on retailers measured by the gross receipts from the sale of tangible personal property sold at retail in this state, or on the storage, use, or other consumption in this state of tangible personal property purchased from a retailer for storage, use, or other consumption in this state. Under existing sales and use tax regulations, gross receipts from a retail sale of a wireless telecommunication device sold in a bundled transaction with wireless telecommunication service is generally equal to the amount of the unbundled sales price of the wireless telecommunication device.
This bill would, instead, limit the gross receipts from a retail sale of a wireless telecommunication device sold in a bundled transaction with wireless telecommunication service to the bundled sales price of the wireless telecommunication device.
The Bradley-Burns Uniform Local Sales and Use Tax Law authorizes counties and cities to impose local sales and use taxes in conformity with the Sales and Use Tax Law, and existing law authorizes districts, as specified, to impose transactions and use taxes in accordance with the Transactions and Use Tax Law, which conforms to the Sales and Use Tax Law. Amendments to state sales and use taxes are incorporated into these laws.
Section 2230 of the Revenue and Taxation Code provides that the state will reimburse counties and cities for revenue losses caused by the enactment of sales and use tax exemptions.
This bill would provide that, notwithstanding Section 2230 of the Revenue and Taxation Code, no appropriation is made and the state shall not reimburse any local agencies for sales and use tax revenues lost by them pursuant to this bill.
This bill would take effect immediately as a tax levy.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.
The people of the State of California do enact as follows:
Section 6012.4 is added to the Revenue and
2Taxation Code, to read:
(a) Notwithstanding Sections 6011 and 6012, “gross
4receipts” and “sales price” from the retail sale of a wireless
5communication device shall be limited to the amount charged for
6the sale of the wireless telecommunication device when that device
7is sold in a bundled transaction.
8(b) “Bundled transaction” means a retail sale of a wireless
9telecommunication device that contractually requires the retailer’s
10customer to activate or contract with a wireless telecommunications
11service provider for utility service for a period greater than one
12month as a condition of that sale.
13(c) “Wireless telecommunication device” means a portable
14communication device, such as a wireless telephone or
pager,
15requiring activation by a wireless telecommunications service
16provider or seller of utility services in order to send, receive, or
17send and receive transmissions via a network of wireless
18transmitters throughout multiple service areas, or otherwise. The
19term includes devices based on analog technology and devices
20based on digital technology.
21(d) “Wireless telecommunications service provider” means a
22utility regulated by the Public Utilities Commission or Federal
23Communication Commission and that offers or provides wireless
24communication or paging services.
Notwithstanding Section 2230 of the Revenue and
2Taxation Code, no appropriation is made by this act and the state
3shall not reimburse any local agency for any sales and use tax
4revenues lost by it under this act.
This act provides for a tax levy within the meaning of
6Article IV of the Constitution and shall go into immediate effect.
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