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, 2015, 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’sbegin delete taxableend delete 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, 2015, exclude from income amounts received by a qualifiedbegin delete personend deletebegin insert taxpayerend insert, 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
P3 1no connection to the state, to perform activity in the state including,
2but not limited to, repairing, renovating, installing, building,
3rendering services, or other business activities and for which
4personnel may be located in the state for extended periods of time
5to perform such activities.
6(c) During such time of operating in the state on a temporary
7basis solely for purposes of helping the state recover from the
8disaster or emergency, these companies and individual employees
9should not be burdened by any requirements for income taxes as
10a result of such activities in the state for a temporary period.
11(d) The state’s nexus thresholds are intended for businesses in
12the state as part of the conduct
of regular business operations and
13should not be directed at companies coming into the state on a
14temporary basis to provide help and assistance in response to a
15declared state disaster or emergency.
16(e) To ensure that companies may focus on quick response to
17the needs of the state and its citizens during a declared state disaster
18or emergency it is appropriate for the Legislature to deem that such
19activity for a reasonable period of time during and after the disaster
20or emergency for repairing and restoration of the often devastating
21damage to property and infrastructure in the state shall not establish
22doing business in the state for purposes of state income taxes.
Section 6357.9 is added to the Revenue and Taxation
24Code, to read:
(a) On and after January 1, 2015, there are exempted
26from the taxes imposed by this part the gross receipts from the sale
27of, and the storage, use, or other consumption of, tangible personal
28property purchased during a disaster period for use by a qualified
29person to be used primarily for the performance of disaster- or
30emergency-related work in this state.
31(b) For purposes of this section, all of the following shall apply:
32(1) “Declared state disaster or emergency” means a disaster or
33emergency event for which the Governor has proclaimed a state
34of emergency or a major disaster or emergency for which the
35President
of the United States has declared to exist in this state.
36(2) “Disaster- or emergency-related work” means repairing,
37renovating, installing, building, or rendering services or other
38business activities that relate to infrastructure that has been
39damaged, impaired, or destroyed as a result of a declared state
40disaster or emergency.
P4 1(3) “Disaster period” means the period of time that begins no
2later than 10 days following the Governor’s proclamation of a state
3of emergency or the President’s declaration of a major disaster or
4emergency in this state, whichever occurs first, and that extends
5for a period of 60 calendar daysbegin delete following the termination of the begin insert
or for any period
6declared disaster or emergency as proclaimedend delete
7determinedend insert by the Governor orbegin delete by concurrent resolution by the begin insert his or
8Legislature pursuant to Section 8629 of the Government Code or
9the President of the United States, whichever occurs firstend delete
10her designeeend insert.
11(4) “Infrastructure” means property and equipment owned or
12used by communication networks, gas and electric distribution
13systems, water pipelines, and public roads and bridges, and related
14support facilities that service multiple customers or citizens,
15including, but not limited to, real and personal property, including
16buildings, offices, power lines, poles, pipes, structures, and
17equipment.
18(5) “Local agency” means a local agency as defined in Section
198680.2 of the Government Code.
20(6) “Primarily” means 50 percent or more of the time.
21(7) “Qualified person” means a person, as defined in Section
226005, but excluding an individual, that meets all of the following:
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 statebegin delete, 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 workend delete
35(8) “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.
P5 1(9) “State agency” means a state agency as defined in Section
28680.8 of the Government Code.
3(c) An exemption shall not be allowed under this section unless
4the purchaser furnishes the retailer with an exemption certificate,
5completed in accordance with any instructions or regulations as
6the board may prescribe, and the retailer retains the exemption
7certificate in its records and furnishes the exemption certificate to
8the board upon request. The exemption certificate shall contain
9the sales price of the qualified tangible personal property.
Section 17137 is added to the Revenue and Taxation
11Code, to read:
(a) For taxable years beginning on and after January
131, 2015, gross income shall not include any amount received by a
14qualifiedbegin delete personend deletebegin insert taxpayerend insert for the performance of disaster- or
15emergency-related work in this state that is performed during the
16disaster period.
17(b) For purposes of this section, all of the following shall apply:
18(1) “Declared state disaster or emergency” means a disaster or
19emergency event for which the Governor has
proclaimed a state
20of emergency or a major disaster or emergency for which the
21President of the United States has declared to exist in this state.
22(2) “Disaster- or emergency-related work” means repairing,
23renovating, installing, building, or rendering services or other
24business activities that relate to infrastructure that has been
25damaged, impaired, or destroyed as a result of a declared state
26disaster or emergency.
27(3) “Disaster period” means the period of time that begins no
28later than 10 days following the Governor’s proclamation of a state
29of emergency or the President’s declaration of a major disaster or
30emergency in this state, whichever occurs first, and that extends
31for a period of 60 calendar daysbegin delete following the termination of the begin insert
or for any period
32declared disaster or emergency as proclaimedend delete
33determinedend insert by the Governor orbegin delete by concurrent resolution by the begin insert his or
34Legislature pursuant to Section 8629 of the Government Code or
35the President of the United States, whichever occurs firstend delete
36her designeeend insert.
37(4) “Infrastructure” means property and equipment owned or
38used by communication networks, gas and electric distribution
39systems, water pipelines, and public roads and bridges, and related
40support facilities that service multiple customers or citizens,
P6 1including, but not limited to, real and personal property, including
2buildings, offices, power lines, poles, pipes, structures, and
3equipment.
4(5) “Local agency” means a local agency as defined in Section
58680.2 of the Government Code.
6(6) “Qualifiedbegin delete person”end deletebegin insert taxpayer”end insert means a limited partnership,
7limited liability partnership, and limited liability company that
8meets both of the following:
9(A) Prior to the commencement date of the declared state
10disaster or emergency, as specified in the Governor’s proclamation
11of a state of emergency or the President’s declaration of a major
12disaster or emergency in this state, was not doing business in this
13state as defined in Section 23101.
14(B) Is doing business in this state as defined in Section 23101
15after the commencement date of the declared state disaster or
16emergency, as specified in the Governor’s proclamation of a state
17of emergency or the President’s declaration of a major disaster or
18emergency in this statebegin delete, upon the request of a registered business .
19or by a state agency or a local agency, for the purpose of
20performing disaster- or emergency-related workend delete
21(7) “Registered business” means a business entity that is
22registered to do business
in this state prior to the commencement
23date of the declared state disaster or emergency, as specified in
24the Governor’s proclamation of a state of emergency or the
25President’s declaration of a major disaster or emergency in this
26state.
27(8) “State agency” means a state agency as defined in Section
288680.8 of the Government Code.
Section 24311 is added to the Revenue and Taxation
30Code, to read:
(a) For taxable years beginning on and after January
321, 2015, gross income shall not include any amount received by a
33qualifiedbegin delete personend deletebegin insert taxpayerend insert for the performance of disaster- or
34emergency-related work in this state that is performed during the
35disaster period.
36(b) For purposes of this section, all of the following shall apply:
37(1) “Declared state disaster or emergency” means a disaster or
38emergency event for which the Governor has
proclaimed a state
39of emergency or a major disaster or emergency for which the
40President of the United States has declared to exist in this state.
P7 1(2) “Disaster- or emergency-related work” means repairing,
2renovating, installing, building, or rendering services or other
3business activities that relate to infrastructure that has been
4damaged, impaired, or destroyed as a result of a declared state
5disaster or emergency.
6(3) “Disaster period” means the period of time that begins no
7later than 10 days following the Governor’s proclamation of a state
8of emergency or the President’s declaration of a major disaster or
9emergency in this state, whichever occurs first, and that extends
10for a period of 60 calendar daysbegin delete following the termination of the begin insert
or for any period
11declared disaster or emergency as proclaimedend delete
12determinedend insert
by the Governor orbegin delete by concurrent resolution by the begin insert his or
13Legislature pursuant to Section 8629 of the Government Code or
14the President of the United States, whichever occurs firstend delete
15her designeeend insert.
16(4) “Infrastructure” means property and equipment owned or
17used by communication networks, gas and electric distribution
18systems, water pipelines, and public roads and bridges, and related
19support facilities that service multiple customers or citizens,
20including, but not limited to, real and personal property, including
21buildings, offices, power lines, poles, pipes, structures, and
22equipment.
23(5) “Local agency” means a local agency as defined in Section
248680.2 of the Government Code.
25(6) “Qualifiedbegin delete person”end deletebegin insert taxpayer”end insert means a corporation that meets
26all of the following:
27(A) Prior to the commencement date of the declared state
28disaster or emergency, as specified in the Governor’s proclamation
29of a state of emergency or the President’s declaration of a major
30disaster or emergency in this state, was not doing business in this
31state as defined in Section 23101.
32(B) Is doing business in this state as defined in Section 23101
33after
the commencement date of the declared state disaster or
34emergency, as specified in the Governor’s proclamation of a state
35of emergency or the President’s declaration of a major disaster or
36emergency in this statebegin delete, upon the request of a registered business .
37or by a state agency or a local agency, for the purpose of
38performing disaster- or emergency-related workend delete
39(7) “Registered business” means a business entity that is
40registered to do business in this state prior to the commencement
P8 1date of the declared state disaster
or emergency, as specified in
2the Governor’s proclamation of a state of emergency or the
3President’s declaration of a major disaster or emergency in this
4state.
5(8) “State agency” means a state agency as defined in Section
68680.8 of the Government Code.
Notwithstanding Section 2230 of the Revenue and
8Taxation Code, no appropriation is made by this act and the state
9shall not reimburse any local agency for any sales and use tax
10revenues lost by it under this act.
This act provides for a tax levy within the meaning of
12Article IV of the Constitution and shall go into immediate effect.
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