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HomeMy WebLinkAboutAB882 - Sales Tax ExemptionREQUEST: xs CITY OF PALM DESERT COMMUNITY SERVICES DEPARTMENT STAFF REPORT CONSIDERATION OF LEGISLATIVE REVIEW COMMITTEE ACTION ON ABEIVAigitt*NuipAtarkwnEETING OF MARCH 27, 2007 .APPROVED DENIED RECEIVED OTHER DATE: April 12, 2007 MBBTING DATE 14- 1. -01 CONTENTS: AB882 Language AYES ; �ef15or\� F ustni �n , i e/ Biel y rtOEs . /U on � , miSENT : JV n RECOMMENDATION: ABSTAIN: Ae. ©ne VERIFIED BY: K-1 r By Minute Motion, concur with the actioPlakiAllosyThOte§itlativiMEivie n 'at it@f Tice meeting of March 27, 2007, and direct staff to prepare a letter of opposition for the Mayor's signature with regard to AB882 (Hernandez) relative to Sales Tax Exemption. EXECUTIVE SUMMARY: Passage of AB882 would exempt energy efficient products from the collection of sales tax for a specified period of time. BACKGROUND: The Sales and Use Tax Law imposes a tax on the gross receipts from the sale of, or the storage, use, or other consumption in this state of tangible personal property and provides various exemptions from that tax. If passed this bill would exempt from tax during a qualified period, which would be defined as the first week of October of each year beginning in 2008, energy efficient products as defined. In addition, this bill would provide, notwithstanding specific sections of the Revenue and Taxation Code, no appropriation is made and the State shall not reimburse local agencies for sales and use tax revenues lost by them pursuant to the enactment of this bill. Because the City of Palm Desert opposes any legislation enacted by the State which would remove local revenues, the Legislative Review Committee recommends that the City Council oppose AB882 and direct staff to prepare a leeter stating that position to apppriate Legislators for the Mayor's signature. Cd�aS� G7i,(I... PATRICIA SCULLY,`tFEE C/ PAU IItN SENIOR MANAGEMENT ANALYST DI TOR OF FINANCE/ CITY TREASURER n SHEILA R. GIL IGAN ACM/COMMUNITY SE Ik CES CARLOS L. ORTEGA CITY MANAGER State Net Bill Text Page 1 of 2 In bill text the following has special meaning underline denotes added text 2007 CA A 882 AUTHOR: Hernandez VERSION: Introduced VERSION DATE: 02/22/2007 ASSEMBLY BILL No. 882 INTRODUCED BY Assembly Member Hernandez FEBRUARY 22, 2007 An act to add Section 6398 to the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. LEGISLATIVE COUNSEL'S DIGEST AB 882, as introduced, Hernandez. Sales and use taxes: exemption: energy efficient products. The Sales and Use Tax Law imposes a tax on the gross receipts from the sale in this state of, or the storage, use, or other consumption in this state of, tangible personal property. That law provides various exemptions from that tax. This bill would also exempt from that tax during a qualified period, which would be defined as the first week of October of each year beginning in 2008, energy efficient products, as defined. Counties and cities are authorized to impose local sales and use taxes in conformity with state sales and use taxes. Exemptions from state sales and use taxes enacted by the Legislature are incorporated into the local taxes. 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 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: http://client. statenet. com/secure/pe/ts.cgi?mode=fetch&text_version=CA2007000A882_20... 2/23/2007 State Net Bill Text Page 2 of 2 SECTION 1. Section 6398 is added to the Revenue and Taxation Code, to read: 6398. (a) During a qualified period, there are exempted from the taxes imposed by this part, the gross receipts from the sale in this state of, and the storage, use, or other consumption in this state of, energy efficient products. (b) For purposes of this section, all of the following apply: (1) "Energy efficient products" means a product that meets or exceeds the applicable ENERGY STAR efficiency requirements developed by the United States Environmental Protection Agency and the United States Department of Energy. (2) "Qualified period" means the period beginning at 12:00 a.m. on each October 1 and ending at 11:59 p.m. on each October 7. The first qualified period begins on October 1, 2008. SEC. 2. Notwithstanding Section 2230 of th http://client.statenet.comisecure/pe/ts.cgi?mode=fetch&text version=CA2007000A882 20... 2/23/2007