HomeMy WebLinkAboutAB 546 - Sales Tax ExemptionCITY OF PALM DESERT
COMMUNITY SERVICES DEPARTMENT
STAFF REPORT
REQUEST: CONSIDERATION OF LEGISLATIVE REVIEW COMMITTEE ACTION
ON AB 546 (KNIGHT) AT ITS MEETING OF MARCH 24, 2009.
DATE: April 9, 2009
CONTENTS: AB 546 Language
RECOMMENDATION:
Y\
By Minute Motion, concur with the action taken by the Legislative Review Committee at its
meeting of March 24, 2009, and direct staff to prepare a letter of opposition for the Mayor's
signature with regard to AB 546 (Knight) relative to sales tax exemption.
BACKGROUND:
The Sales and Use Tax Law imposes a tax on retailers measured by the gross receipts from the
sale, storage, use or other consumption in the state of tangible personal property. If passed, AB
546 would exempt from sales and use tax, the gross receipts from the purchase of equipment
used in the manufacturing of solar voltaic panels. Because the City of Palm Desert has a policy
of opposing any bill that removes sales tax needed to fund programs and facilities for residents
and guests.
Therefore, the Legislative Review Committee recommends that the City Council oppose AB 546
and direct staff to prepare a letter stating that position to appropriate legislators and committees
for the Mayor's signature.
PATRICIA SCULLY, CF
NIOR MAN
/'SHEILA R. .6If
ACM/COMMUNITY SERA ES
aido-
PAUL GIBSON
T ANALYST DICTOR OF FINANCE/CITY TREASURER
HLMUTH
Y MANAGER
CITY COUNCILACTJON
APPROVED ✓ DENIED
RECEIVED .OTI-IER
MEET1t�'G DATE �-9-v��
AYES. ! EX Snn, FerJusen, Finer-fy, 11 ,3,C
NOES: Nr'1 J �J
ABSENT: Ai on 'E-
ABSTAIN: N/)lie.
VERIFIED BY:__ ,e/rer
Original on File with City Clerk's Office
State Net Bill Text
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2009 CA A 546
AUTHOR: Knight
VERSION: Introduced
VERSION DATE: 02/25/2009
ASSEMBLY BILL No. 546
INTRODUCED BY Assembly Member Knight
FEBRUARY 25, 2009
An act to add Section 6377 to the Revenue and Taxation Code, relating to taxation, to take effect
immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
AB 546, as introduced, Knight. Sales and use taxes: exemption: manufacturing equipment:
photovoltaic panels.
The Sales and Use Tax Law imposes 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.
This bill would exempt from sales and use taxes the gross receipts from the sale of, and the storage,
use, or other consumption of, tangible personal property, as specified, purchased for use primarily in the
manufacturing of solar photovoltaic panels.
This bill would specify that this exemption does not apply to local sales and use taxes, transactions
and use taxes, and specified state sales and use taxes.
This bill would take effect immediately as a tax levy, but its operative date would depend on its
effective date.
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 6377 is added to the Revenue and Taxation Code, to read:
6377. (a) There are exempted from the taxes imposed by this part the gross receipts from the sale of,
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and the storage, use, or other consumption in this state of, tangible personal property purchased for use
primarily in any stage of the manufacturing of solar photovoltaic panels.
(b) For purposes of this section:
(1) "Manufacturing" means the activity of converting or conditioning property by changing the form,
composition, quality, or character of the property for sale at retail or for use in the manufacturing of a
product to be sold at retail. Manufacturing includes any improvements to tangible personal property that
result in a greater service life or greater functionality than that of the original property.
(2) "Tangible personal property" includes, but is not limited to, machinery and equipment, including
component parts and contrivances such as belts, shafts, moving parts, and operating structures.
(c) No exemption shall be allowed under this section unless the purchaser furnishes the retailer with
an exemption certificate, completed in accordance with any instruction or regulation as the board may
prescribe, and the retailer subsequently furnishes the board with a copy of the exemption certificate. The
exemption certificate shall contain the purchase price of the machinery or equipment, the sale or storage,
use, or other consumption of which is exempt from taxes pursuant to subdivision (a).
(d) (1) Notwithstanding any provision of 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)), the exemption provided by this section shall not apply with respect
to any tax levied by a county, city, or district pursuant to, or in accordance with, either of those laws.
(2) The exemption provided by this section shall not apply with respect to any tax levied pursuant to
Sections 6051.2, 6051.5, 6201.2, and 6201.5 or pursuant to Section 35 of Article XIII of the California
Constitution.
SEC. 2. This act provides for a tax levy within the meaning of Article IV of the Constitution and shall
go into immediate effect. However, the provisions of this act shall become operative on the first day of
the first calendar quarter commencing more than 90 days after the effective date of this act.
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