Amended in Senate May 21, 2014

Senate Bill No. 983

Introduced by Senator Hernandez

February 11, 2014

An act to amend Section begin delete 7205 of the Revenue and Taxation Code, relating to taxation end delete begin insert 53084.5 of the Government Code, relating to local government end insert .

LEGISLATIVE COUNSEL’S DIGEST

SB 983, as amended, Hernandez. begin delete Local sales taxes: card lock fuel: place of sale. end delete begin insert Cities and counties: sales and use taxes: revenue sharing agreement: card lock system. end insert

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. That law provides that for the purpose of a local sales tax adopted pursuant to that law, all retail sales are consummated at the place of business of the retailer unless otherwise specified.

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This bill would instead provide that, in the case of a sale of fuel for card lock systems, the place at which the retail sale of card lock fuel is consummated is the point of delivery of fuel to the vehicle.

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Existing law prohibits a local agency, including a city or county, from entering into any form of agreement with any other person that would involve the payment, transfer, diversion, or rebate of any amount of Bradley-Burns local tax proceeds for any purpose if the agreement results in a reduction in the amount of revenue that is received by another local agency from a retailer that is located within the territorial jurisdiction of that other local agency, and the retailer continues to maintain a physical presence within the territorial jurisdiction of that other local agency, with specified exceptions, including an exception for an agreement to pay or rebate any Bradley-Burns local tax revenue relating to a buying company, as defined.

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This bill would provide that, on or after May 1, 2014, a buying company does not include a retailer that contracts to sell fuel through a card lock system.

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Vote: majority. Appropriation: no. Fiscal committee:  begin delete yes end delete begin insert no end insert . State-mandated local program: no.

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

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begin insert SECTION 1. end insert   

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begin insert Section 53084.5 of the end insert begin insert Government Code end insert begin insert is
amended to read: end insert

53084.5.  

(a) On or after the date the act adding this section
takes effect, a local agency shall not enter into any form of
agreement that would result, directly or indirectly, in the payment,
transfer, diversion, or rebate of any tax revenue resulting from the
imposition of a sales and use tax under the Bradley-Burns Uniform
Local Sales and Use Tax Law (Part 1.5 (commencing with Section
7200) of Division 2 of the Revenue and Taxation Code) to any
person for any purpose when both of the following apply:

(1) The agreement results in a reduction in the amount of
revenue that is received by another local agency from a retailer
that is located within the territorial jurisdiction of that other local
agency from the tax proceeds collected under the Bradley-Burns
Uniform Local Sales and Use Tax Law (Part 1.5 (commencing
with Section 7200) of Division 2 of the Revenue and Taxation
Code). This subdivision shall not apply to a reduction in the use
tax proceeds that are distributed to that other local agency through
one or more countywide pools.

(2) The retailer continues to maintain a physical presence within
the territorial jurisdiction of that other local agency. This
subdivision shall not apply if the retailer has expanded its
operations into another jurisdiction with the result that the retailer
is conducting a comparable operation within the jurisdiction of
both local agencies.

(b) For the purposes of this section, the following definitions
have the following meanings:

(1) “Local agency” means a chartered or general law city, a
chartered or general law county, or a city and county.

(2) “Retailer” means a retailer as defined by Section 6015 of
the Revenue and Taxation Code.

(3) “Physical presence” means the lease or ownership of any
real property for the purpose of carrying on business operations.

(c) This section shall not apply to local tax proceeds provided
by a local agency to a retailer if the funds are used to reimburse
the retailer for the construction of public works improvements that
serve all or a portion of the territorial jurisdiction of the local
agency.

(d)  begin insert (1) end insert begin insert   end insert This section shall not apply to an agreement to pay or
rebate any tax revenue resulting from the imposition of a sales and
use tax under the Bradley-Burns Uniform Local Sales and Use
Tax Law (Part 1.5 (commencing with Section 7200) of Division
2 of the Revenue and Taxation Code) relating to a buying company.
“Buying company” means, and is limited to, a legal entity that is
separate from another legal entity that owns, controls, or is
otherwise related to, the buying company and which has been
created for the purpose of performing administrative functions,
including acquiring goods and services for the other entity, as
defined by the State Board of Equalization, and meets requirements
of a buying company under Sections 6066 to 6075, inclusive, of
the Revenue and Taxation Code, and the regulations adopted
pursuant to those sections.

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(2) (A) Notwithstanding paragraph (1), on or after May 1,
2014, a buying company does not include a retailer that contracts
to sell fuel through a card lock system.

end insert begin insert

(B) “Card lock system” means a system in which owners of
unattended card lock fueling stations form a network whereby
customers may purchase fuel at any of the network’s participating
fueling stations by use of a card issued to the customer, and where
prices are not posted at the pump and no receipt is given at the
time of delivery.

end insert begin insert

(C) This paragraph does not apply to an agreement entered
into before May 1, 2014, to pay or rebate any tax revenue resulting
from the imposition of a sales and use tax under the Bradley-Burns
Uniform Local Sales and Use Tax Law (Part 1.5 (commencing
with Section 7200) of Division 2 of the Revenue and Taxation
Code) relating to a buying company that is a retailer that contracts
to sell fuel through a card lock system.

end insert

(e) This section shall not apply to any agreement by a local
agency to pay or rebate any use tax revenue resulting from the
imposition of a sales and use tax under the Bradley-Burns Uniform
Local Sales and Use Tax Law (Part 1.5 (commencing with Section
7200) of Division 2 of the Revenue and Taxation Code) relating
to a use tax direct payment permit issued under Section 7051.3 of
the Revenue and Taxation Code.

(f) Nothing in this section shall be interpreted to limit the ability
of a local agency to contract with or otherwise enter into an
agreement pursuant to subdivision (b) of Section 7056 of the
Revenue and Taxation Code.

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SECTION 1.  

Section 7205 of the Revenue and Taxation Code
is amended to read:

7205.  

(a) For the purpose of a sales tax imposed by an
ordinance adopted pursuant to this part, all retail sales are
consummated at the place of business of the retailer unless the
tangible personal property sold is delivered by the retailer or his
or her agent to an out-of-state destination or to a common carrier
for delivery to an out-of-state destination. The gross receipts from
those sales shall include delivery charges, when those charges are
subject to the state sales and use tax, regardless of the place to
which delivery is made.

(b) (1) In the event a retailer has no permanent place of business
in the state or has more than one place of business, the place or
places at which the retail sales are consummated for the purpose
of a sales tax imposed by an ordinance adopted pursuant to this
part shall, subject to paragraph (2), be determined under rules and
regulations to be prescribed and adopted by the board.

(2) In the case of a sale of jet fuel, the place at which the retail
sale of that jet fuel is consummated for the purpose of a sales tax
imposed by an ordinance adopted pursuant to this part is the point
of the delivery of that jet fuel to the aircraft.

(3) (A) In the case of a sale of fuel for card lock systems, the
place at which the retail sale of card lock fuel is consummated for
the purpose of a sales tax imposed by an ordinance adopted
pursuant to this part is the point of delivery of fuel to the vehicle.

(B) “Card lock system” means a system where owners of
unattended card lock fueling stations form a network whereby
customers may purchase fuel at any of the network’s participating
fueling stations by use of a card issued to the customer, and where
prices are not posted at the pump and no receipt is given at the
time of delivery.

end delete