California Legislature—2013–14 Regular Session

Assembly Bill No. 2758

Introduced by Committee on Revenue and Taxation (Bocanegra (Chair), Gordon, Mullin, Pan, V. Manuel Pérez, and Ting)

March 24, 2014

An act to amend Sections 6452.1 and 18510 of the Revenue and Taxation Code, relating to taxation.

LEGISLATIVE COUNSEL’S DIGEST

AB 2758, as introduced, Committee on Revenue and Taxation. Sales and use taxes: administration: qualified use tax: acceptable tax return.

The Sales and Use Tax Law generally provides, for a transaction not subject to sales tax, that every person storing, using, or otherwise consuming in this state tangible personal property purchased from a retailer for storage, use, or other consumption in this state is liable for use tax, and must pay the use tax to the State Board of Equalization, unless that person has paid the use tax to a retailer registered to collect the tax. Existing law authorizes a person to make an irrevocable election to report qualified use tax, as defined, on that person’s income tax return. Under existing law, any payments and credits shown on the return, together with any other credits associated with that person’s account, of a person that elects to report qualified use tax on an acceptable tax return is applied first to taxes imposed under the Personal Income Tax Law or the Corporation Tax Law, including penalties and interest, and then to qualified use tax.

This bill would instead require, of payments shown on the return of a person that reports qualified use tax on an acceptable tax return, an amount equal to the qualified use tax liability reported on that acceptable tax return be applied to that liability, as provided.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 6452.1 of the Revenue and Taxation
Code is amended to read:

6452.1.  

(a) Notwithstanding Section 6451, every person that
purchases tangible personal property, the storage, use, or other
consumption of which is subject to qualified use tax, as defined
in subdivision (d), that is otherwise required to report and remit
that tax pursuant to this part, may elect to report and remit qualified
use tax on an acceptable tax return.

(b) (1) A person that reports qualified use tax on an acceptable
tax return is deemed to have made the election authorized by this
section.

(2) (A) In the case of a married individual filing a separate
California personal income tax return, an election may be made
to report either one-half of the qualified use tax or the entire
qualified use tax on his or her separate California personal income
tax return.

(B) If an individual elects to report one-half of the qualified use
tax, that election will not be binding with respect to the remaining
one-half of the qualified use tax owed by that individual and that
individual’s spouse.

(c) An election to report qualified use tax on an acceptable tax
return shall be irrevocable. An acceptable tax return that contains
use tax shall be considered a tax return for purposes of this part.

(d) For purposes of this section:

(1) “Acceptable tax return” means a timely filed original return
that is filed pursuant to Article 1 (commencing with Section
18501), Article 2 (commencing with Section 18601), Section
18633, Section 18633.5 of Chapter 2 (commencing with Section
18501) of Part 10.2, or Article 3 (commencing with Section 23771)
of Chapter 4 of Part 11.

(2) (A) Except as provided in subparagraph (B), “qualified use
tax” means either of the following:

(i) For one or more single nonbusiness purchases of individual
items of tangible personal property each with a sales price of less
than one thousand dollars ($1,000), either of the following:

(I) The use tax imposed under this part, Article XIII of the
California Constitution, in conformity with the Bradley-Burns
Uniform Local Sales and Use Tax Law (Part 1.5 (commencing
with Section 7200)), or in accordance with the Transactions and
Use Tax Law (Part 1.6 (commencing with Section 7251)) that has
not been paid to a retailer holding a seller’s permit or certificate
of registration-use tax.

(II) The estimated amount of use tax as calculated by the board.
The board shall annually calculate the estimated amount of use
tax due according to a person’s adjusted gross income and by July
30 of each calendar year make available to Franchise Tax Board
such amounts in the form of a use tax table as part of the
accompanying instructions of the acceptable tax return.

(ii) For one or more single nonbusiness purchases of individual
items of tangible personal property each with a sales price of one
thousand dollars ($1,000) or more, or for any tangible personal
property purchased for use in a trade or business, the amount of
use tax imposed under this part, Article XIII of the California
Constitution, the Bradley-Burns Uniform Local Sales and Use Tax
Law (Part 1.5 (commencing with Section 7200)), or the
Transactions and Use Tax Law (Part 1.6 (commencing with Section
7251)) that has not been paid to a retailer holding a seller’s permit
or certificate of registration-use tax.

(B) “Qualified use tax” does not include:

(i) Use tax imposed on the storage, use, or other consumption
of a mobilehome or a commercial coach that is required to be
registered annually pursuant to the Health and Safety Code or use
tax imposed on the storage, use, or other consumption of a vehicle
subject to identification under Division 16.5 (commencing with
Section 38000) of the Vehicle Code, or a vehicle that qualifies
under the permanent trailer identification plate program pursuant
to subdivision (a) of Section 5014.1 of the Vehicle Code.

(ii) Use tax imposed on the storage, use, or other consumption
of a vehicle, vessel, or aircraft.

(iii) Use tax imposed on a lease of tangible personal property.

(iv) Use tax imposed on the storage, use, or other consumption
of cigarettes, tobacco products, or cigarettes and tobacco products
for which the purchaser is registered with the board as a cigarette
consumer, a tobacco products consumer, or a cigarette and tobacco
products consumer.

(e) (1) If a person elects to report qualified use tax on an
acceptable tax return, that person shall report and remit the
qualified use tax by reporting the amount due based on all taxable
purchases of tangible personal property made during the taxable
year for which the acceptable tax return is required to be filed. A
person that has made one or more single nonbusiness purchases
of individual items of tangible personal property each with a sales
price of less than one thousand dollars ($1,000) may satisfy his or
her tax liability for those purchases by using the use tax table
shown in the accompanying instructions of the acceptable tax
return.

(2) The qualified use tax shall be reported on and remitted with
an acceptable tax return that is required to be filed for the taxable
year in which the liability for the qualified use tax was incurred.

(f) (1) The penalties and interest imposed under this part, in
conformity with the Bradley-Burns Uniform Local Sales and Use
Tax Law (Part 1.5 (commencing with Section 7200)), or in
accordance with the Transactions and Use Tax Law (Part 1.6
(commencing with Section 7251)) shall apply to use tax reported
as qualified use tax on an acceptable return.

(2) Any claims for refunds or credits of any use tax reported as
qualified use tax on an acceptable tax return shall be made in
accordance with Chapter 7 (commencing with Section 6901) of
this part.

(3) Qualified use tax shall be considered to be timely reported
and remitted for purposes of this part, in conformity with the
Bradley-Burns Uniform Local Sales and Use Tax Law (Part 1.5
(commencing with Section 7200)), and in accordance with the
Transactions and Use Tax Law (Part 1.6 (commencing with Section
7251)), if the qualified use tax is timely reported on and remitted
with an acceptable tax return in accordance with the provisions of
this section.

(g) Notwithstanding a person’s payment of qualified use tax on
an acceptable tax return, the board is not precluded from making
any determinations for understatements of qualified use tax against
that person in accordance with this chapter. However, with respect
to one or more single nonbusiness purchases of individual items
of tangible personal property each with a sales price of less than
one thousand dollars ($1,000), the board shall be precluded from
making any such determination against any person who uses the
use tax table for purposes of satisfying his or her use tax liability
when the person uses that table in accordance with the
accompanying instructions.

begin delete

(h) Any payments and credits shown on the return, together
with any other credits associated with that person’s account, of a
person that elects to report qualified use tax on an acceptable tax
return shall be applied in the following order:

end delete begin delete

(1) Taxes imposed under Part 10 (commencing with Section
17001) or Part 11 (commencing with Section 23001), including
penalties and interest, if any, imposed under Part 10.2 (commencing
with Section 18401).

end delete begin delete

(2) Qualified use tax reported on the acceptable tax return in
accordance with this section.

end delete begin insert

(h) (1) Of payments shown on the return of a person that reports
qualified use tax on an acceptable tax return, an amount equal to
the qualified use tax liability reported on that acceptable tax return
in accordance with this section shall be applied to that liability.

end insert begin insert

(2) This subdivision shall apply to purchases of tangible
personal property made on or after January 1, 2014, in taxable
years beginning on or after January 1, 2014.

end insert

(i) (1) This section does not apply to a person who is otherwise
required to hold a seller’s permit or to register with the State Board
of Equalization pursuant to Part 1 (commencing with Section 6001)
of this division.

(2) This section applies to purchases of tangible personal
property made on or after January 1, 2010, in taxable years
beginning on or after January 1, 2010.

(3) The amendments made by begin delete the act adding this paragraph end delete
begin insert Chapter 14 of the Statutes of 2011 end insert shall apply to purchases of
tangible personal property made on or after January 1, 2011, in
taxable years beginning on or after January 1, 2011.

SEC. 2.  

Section 18510 of the Revenue and Taxation Code is
amended to read:

18510.  

(a) (1) The Franchise Tax Board shall revise the returns
required to be filed pursuant to this article, Article 2 (commencing
with Section 18601), Section 18633, Section 18633.5, and Article
3 (commencing with Section 23771) of Chapter 4 of Part 11, and
the accompanying instructions for filing those returns, in a form
and manner approved by the State Board of Equalization, to allow
a person to report and pay qualified use tax in accordance with the
provisions of Section 6452.1.

(2) Within 10 working days of receiving from the Franchise
Tax Board the returns and instructions described in paragraph (1),
the State Board of Equalization shall do either of the following:

(A) Approve the form and manner of the returns and instructions
and notify the Franchise Tax Board of this approval.

(B) Submit comments to the Franchise Tax Board regarding
changes to the returns and instructions that shall be incorporated
before the State Board of Equalization approves the form and
manner of the returns and instructions.

begin delete

(b) Any payments and credits shown on the return, together
with any other credits associated with that person’s account, of a
person that elects to report qualified use tax on an acceptable tax
return shall be applied in the following order:

(1) Taxes imposed under Part 10 (commencing with Section
17001) or Part 11 (commencing with Section 23001), including
penalties and interest, if any, imposed under this part.

(2) Qualified use tax as reported on the acceptable tax return,
in accordance with Section 6452.1.

end delete begin insert

(b) (1) Of payments shown on the return of a person that reports
qualified use tax on an acceptable tax return, an amount equal to
the qualified use tax liability reported on that acceptable tax return
in accordance with Section 6452.1 shall be applied to that liability.

end insert begin insert

(2) This subdivision shall apply to returns filed for taxable years
beginning on or after January 1, 2014.

end insert

(c) The Franchise Tax Board shall transfer the qualified use tax
received pursuant to Section 6452.1, and any information the State
Board of Equalization deems necessary for its administration of
the use tax, to the State Board of Equalization within 60 days from
the date the use tax is received or the acceptable tax return is
processed, whichever is later.

(d) This section shall be operative for returns filed for taxable
years beginning on and after January 1, 2010.

(e) The amendments made by begin delete the act adding this subdivision end delete
begin insert Chapter 14 of the Statutes of 2011 end insert shall apply to returns filed for
taxable years beginning on and after January 1, 2011.