SB 560, as amended, Anderson. Disaster relief: sales and use tax: exemption: income taxes: gross income: exclusion.
Existing sales and use tax laws impose 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. Those laws provide various exemptions from those taxes.
This bill would exempt from those taxes, on and after January 1,begin delete 2014,end deletebegin insert 2015,end insert the gross receipts from the sale of, and the storage, use, or other consumption of, tangible personal property purchased during a disaster period for use by a qualified
person to be used primarily for the performance of disaster- or emergency-related work in this state, as provided. The bill would require the purchaser to furnish the retailer with an exemption certificate, as specified.
The Personal Income Tax Law and the Corporation Tax Law impose taxes on taxpayers measured by the amount of the taxpayer’s taxable income for the taxable year, but exclude certain items of income from the computation of tax.
This bill would, under both laws, for taxable years beginning on and after January 1,begin delete 2014,end deletebegin insert 2015,end insert exclude from income amounts received by a qualified person, as defined, for the performance of disaster- or emergency-related work in this state that is performed during the disaster period, as
provided.
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 act provides for a tax levy within the meaning of Article IV of the Constitution and shall go into immediate effect.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.
The people of the State of California do enact as follows:
The Legislature finds and declares all of the
2following:
3(a) During times of storm, flood, fire, earthquake, hurricane, or
4other disaster or emergency, many companies bring in resources
5and personnel from other states throughout the United States on a
6temporary basis to expedite the often enormous and overwhelming
7task of cleaning up, restoring and repairing damaged buildings,
8equipment, and property, or even deploying or building new
9replacement facilities in the state.
10(b) This may involve the need for out-of-state companies,
11including out-of-state affiliates of companies based in
the state to
12bring in resources, property or personnel that previously have had
13no connection to the state, to perform activity in the state including,
14but not limited to, repairing, renovating, installing, building,
P3 1rendering services, or other business activities and for which
2personnel may be located in the state for extended periods of time
3to perform such activities.
4(c) During such time of operating in the state on a temporary
5basis solely for purposes of helping the state recover from the
6disaster or emergency, these companies and individual employees
7should not be burdened by any requirements for income taxes as
8a result of such activities in the state for a temporary period.
9(d) The state’s nexus thresholds are intended for businesses in
10the state as part of the
conduct of regular business operations and
11should not be directed at companies coming into the state on a
12temporary basis to provide help and assistance in response to a
13declared state disaster or emergency.
14(e) To ensure that companies may focus on quick response to
15the needs of the state and its citizens during a declared state disaster
16or emergency it is appropriate for the Legislature to deem that such
17activity for a reasonable period of time during and after the disaster
18or emergency for repairing and restoration of the often devastating
19damage to property and infrastructure in the state shall not establish
20doing business in the state for purposes of state income taxes.
Section 6357.9 is added to the Revenue and Taxation
22Code, to read:
(a) On and after January 1,begin delete 2014,end deletebegin insert 2015,end insert there are
24exempted from the taxes imposed by this part the gross receipts
25from the sale of, and the storage, use, or other consumption of,
26tangible personal property purchased during a disaster period for
27use by a qualified person to be used primarily for the performance
28of disaster- or emergency-related work in this state.
29(b) For purposes of this section, all of the following shall apply:
30(1) “Declared
state disaster or emergency” means a disaster or
31emergency event for which the Governor has proclaimed a state
32of emergency or a major disaster or emergency for which the
33President of the United States has declared to exist in this state.
34(2) “Disaster- or emergency-related work” means repairing,
35renovating, installing, building, or rendering services or other
36business activities that relate to infrastructure that has been
37damaged, impaired, or destroyed as a result of a declared state
38disaster or emergency.
39(3) “Disaster period” means the period of time that begins no
40later than 10 days following the Governor’s proclamation of a state
P4 1of emergency or the President’s declaration of a major disaster or
2emergency in this state, whichever occurs first, and that extends
3for a period
of 60 calendar days following the termination of the
4declared disaster or emergency as proclaimed by the Governor or
5by concurrent resolution by the Legislature pursuant to Section
68629begin insert of the Government Codeend insert or the President of the United States,
7whichever occurs first.
8(4) “Infrastructure” means property and equipment owned or
9used by communication networks, gas and electric distribution
10systems, water pipelines, and public roads and bridges, and related
11support facilities that service multiple customers or citizens,
12including, but not limited to, real and personal property, including
13buildings, offices, power lines, poles, pipes, structures, and
14equipment.
15(5) “Local agency”
means a local agency as defined in Section
168680.2 of the Government Code.
17(6) “Primarily” means 50 percent or more of the time.
18(7) “Qualified person” means a person, as defined in Section
196005, but excluding an individual, that meets all of the following:
20(A) Prior to the commencement date of the declared state
21disaster or emergency, as specified in the Governor’s proclamation
22of a state of emergency or the President’s declaration of a major
23disaster or emergency in this state, was not doing business in this
24state as defined in Section 23101.
25(B) Is doing business in this state as defined in Section 23101
26after the commencement date of the declared state disaster or
27emergency,
as specified in the Governor’s proclamation of a state
28of emergency or the President’s declaration of a major disaster or
29emergency in this state, upon the request of a registered business
30or by a state agency or a local agency, for the purpose of
31performingbegin delete ofend delete disaster- or emergency-related work.
32(8) “Registered business” means a business entity that is
33registered to do business in this state prior to the commencement
34date of the declared state disaster or emergency, as specified in
35the Governor’s proclamation of a state of emergency or the
36President’s declaration of a major disaster or emergency in this
37state.
38(9) “State agency” means a state agency as defined in Section
398680.8 of the Government
Code.
P5 1(c) An exemption shall not be allowed under this section unless
2the purchaser furnishes the retailer with an exemption certificate,
3completed in accordance with any instructions or regulations as
4the board may prescribe, and the retailer retains the exemption
5certificate in its records and furnishes the exemption certificate to
6the board upon request. The exemption certificate shall contain
7the sales price of the qualified tangible personal property.
Section 17137 is added to the Revenue and Taxation
9Code, to read:
(a) For taxable years beginning on and after January
111,begin delete 2014,end deletebegin insert 2015,end insert gross income shall not include any amount received
12by a qualified person for the performance of disaster- or
13emergency-related work in this state that is performed during the
14disaster period.
15(b) For purposes of this section, all of the following shall apply:
16(1) “Declared state disaster or emergency” means a disaster or
17emergency event for which the Governor has proclaimed
a state
18of emergency or a major disaster or emergency for which the
19President of the United States has declared to exist in this state.
20(2) “Disaster- or emergency-related work” means repairing,
21renovating, installing, building, or rendering services or other
22business activities that relate to infrastructure that has been
23damaged, impaired, or destroyed as a result of a declared state
24disaster or emergency.
25(3) “Disaster period” means the period of time that begins no
26later than 10 days following the Governor’s proclamation of a state
27of emergency or the President’s declaration of a major disaster or
28emergency in this state, whichever occurs first, and that extends
29for a period of 60 calendar days following the termination of the
30declared disaster or emergency as proclaimed by
the Governor or
31by concurrent resolution by the Legislature pursuant to Section
328629begin insert of the Government Codeend insert or the President of the United States,
33whichever occurs first.
34(4) “Infrastructure” means property and equipment owned or
35used by communication networks, gas and electric distribution
36systems, water pipelines, and public roads and bridges, and related
37support facilities that service multiple customers or citizens,
38including, but not limited to, real and personal property, including
39buildings, offices, power lines, poles, pipes, structures, and
40equipment.
P6 1(5) “Local agency” means a local agency as defined in Section
28680.2 of the Government Code.
3(6) “Qualified person” means a limited partnership, limited
4liability partnership, and limited liability company that meets both
5of the following:
6(A) Prior to the commencement date of the declared state
7disaster or emergency, as specified in the Governor’s proclamation
8of a state of emergency or the President’s declaration of a major
9disaster or emergency in this state, was not doing business in this
10state as defined in Section 23101.
11(B) Is doing business in this state as defined in Section 23101
12after the commencement date of the declared state disaster or
13emergency, as specified in the Governor’s proclamation of a state
14of emergency or the President’s declaration of a major disaster or
15emergency in this state,
upon the request of a registered business
16or by a state agency or a local agency, for the purpose of
17performing disaster- or emergency-related work.
18(7) “Registered business” means a business entity that is
19registered to do business in this state prior to the commencement
20date of the declared state disaster or emergency, as specified in
21the Governor’s proclamation of a state of emergency or the
22President’s declaration of a major disaster or emergency in this
23state.
24(8) “State agency” means a state agency as defined in Section
258680.8 of the Government Code.
Section 24311 is added to the Revenue and Taxation
27Code, to read:
(a) For taxable years beginning on and after January
291,begin delete 2014,end deletebegin insert 2015,end insert gross income shall not include any amount received
30by a qualified person for the performance of disaster- or
31emergency-related work in this state that is performed during the
32disaster period.
33(b) For purposes of this section, all of the following shall apply:
34(1) “Declared state disaster or emergency” means a disaster or
35emergency event for which the Governor has proclaimed
a state
36of emergency or a major disaster or emergency for which the
37President of the United States has declared to exist in this state.
38(2) “Disaster- or emergency-related work” means repairing,
39renovating, installing, building, or rendering services or other
40business activities that relate to infrastructure that has been
P7 1damaged, impaired, or destroyed as a result of a declared state
2disaster or emergency.
3(3) “Disaster period” means the period of time that begins no
4later than 10 days following the Governor’s proclamation of a state
5of emergency or the President’s declaration of a major disaster or
6emergency in this state, whichever occurs first, and that extends
7for a period of 60 calendar days following the termination of the
8declared disaster or emergency as proclaimed by
the Governor or
9by concurrent resolution by the Legislature pursuant to Section
108629begin insert of the Government Codeend insert or the President of the United States,
11whichever occurs first.
12(4) “Infrastructure” means property and equipment owned or
13used by communication networks, gas and electric distribution
14systems, water pipelines, and public roads and bridges, and related
15support facilities that service multiple customers or citizens,
16including, but not limited to, real and personal property, including
17buildings, offices, power lines, poles, pipes, structures, and
18equipment.
19(5) “Local agency” means a local agency as defined in Section
208680.2 of the Government Code.
21(6) “Qualified person” means a corporation that meets all of the
22following:
23(A) Prior to the commencement date of the declared state
24disaster or emergency, as specified in the Governor’s proclamation
25of a state of emergency or the President’s declaration of a major
26disaster or emergency in this state, was not doing business in this
27state as defined in Section 23101.
28(B) Is doing business in this state as defined in Section 23101
29after the commencement date of the declared state disaster or
30emergency, as specified in the Governor’s proclamation of a state
31of emergency or the President’s declaration of a major disaster or
32emergency in this state, upon the request of a registered business
33or by a state agency or a local
agency, for the purpose of
34performing disaster- or emergency-related work.
35(7) “Registered business” means a business entity that is
36registered to do business in this state prior to the commencement
37date of the declared state disaster or emergency, as specified in
38the Governor’s proclamation of a state of emergency or the
39President’s declaration of a major disaster or emergency in this
40state.
P8 1(8) “State agency” means a state agency as defined in Section
28680.8 of the Government Code.
Notwithstanding Section 2230 of the Revenue and
4Taxation Code, no appropriation is made by this act and the state
5shall not reimburse any local agency for any sales and use tax
6revenues lost by it under this act.
This act provides for a tax levy within the meaning of
8Article IV of the Constitution and shall go into immediate effect.
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