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SB-560 Disaster relief: sales and use tax: exemption: income taxes: gross income: exclusion.(2013-2014)

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Amended  IN  Senate  January 15, 2014
Amended  IN  Senate  January 06, 2014
Amended  IN  Senate  April 01, 2013

CALIFORNIA LEGISLATURE— 2013–2014 REGULAR SESSION

Senate Bill No. 560


Introduced by Senator Anderson

February 22, 2013


An act to add Sections 6357.9, 17137, and 24311 to the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


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’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, 2015, exclude from income amounts received by a qualified person taxpayer, 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   Local Program: YES  

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


SECTION 1.

 The Legislature finds and declares all of the following:
(a) During times of storm, flood, fire, earthquake, hurricane, or other disaster or emergency, many companies bring in resources and personnel from other states throughout the United States on a temporary basis to expedite the often enormous and overwhelming task of cleaning up, restoring and repairing damaged buildings, equipment, and property, or even deploying or building new replacement facilities in the state.
(b) This may involve the need for out-of-state companies, including out-of-state affiliates of companies based in the state to bring in resources, property or personnel that previously have had no connection to the state, to perform activity in the state including, but not limited to, repairing, renovating, installing, building, rendering services, or other business activities and for which personnel may be located in the state for extended periods of time to perform such activities.
(c) During such time of operating in the state on a temporary basis solely for purposes of helping the state recover from the disaster or emergency, these companies and individual employees should not be burdened by any requirements for income taxes as a result of such activities in the state for a temporary period.
(d) The state’s nexus thresholds are intended for businesses in the state as part of the conduct of regular business operations and should not be directed at companies coming into the state on a temporary basis to provide help and assistance in response to a declared state disaster or emergency.
(e) To ensure that companies may focus on quick response to the needs of the state and its citizens during a declared state disaster or emergency it is appropriate for the Legislature to deem that such activity for a reasonable period of time during and after the disaster or emergency for repairing and restoration of the often devastating damage to property and infrastructure in the state shall not establish doing business in the state for purposes of state income taxes.

SEC. 2.

 Section 6357.9 is added to the Revenue and Taxation Code, to read:

6357.9.
 (a) On and after January 1, 2015, there are exempted from the taxes imposed by this part 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.
(b) For purposes of this section, all of the following shall apply:
(1) “Declared state disaster or emergency” means a disaster or emergency event for which the Governor has proclaimed a state of emergency or a major disaster or emergency for which the President of the United States has declared to exist in this state.
(2) “Disaster- or emergency-related work” means repairing, renovating, installing, building, or rendering services or other business activities that relate to infrastructure that has been damaged, impaired, or destroyed as a result of a declared state disaster or emergency.
(3) “Disaster period” means the period of time that begins no later than 10 days following the Governor’s proclamation of a state of emergency or the President’s declaration of a major disaster or emergency in this state, whichever occurs first, and that extends for a period of 60 calendar days following the termination of the declared disaster or emergency as proclaimed or for any period determined by the Governor or by concurrent resolution by the Legislature pursuant to Section 8629 of the Government Code or the President of the United States, whichever occurs first his or her designee.
(4) “Infrastructure” means property and equipment owned or used by communication networks, gas and electric distribution systems, water pipelines, and public roads and bridges, and related support facilities that service multiple customers or citizens, including, but not limited to, real and personal property, including buildings, offices, power lines, poles, pipes, structures, and equipment.
(5) “Local agency” means a local agency as defined in Section 8680.2 of the Government Code.
(6) “Primarily” means 50 percent or more of the time.
(7) “Qualified person” means a person, as defined in Section 6005, but excluding an individual, that meets all of the following:
(A) Prior to the commencement date of the declared state disaster or emergency, as specified in the Governor’s proclamation of a state of emergency or the President’s declaration of a major disaster or emergency in this state, was not doing business in this state as defined in Section 23101.
(B) Is doing business in this state as defined in Section 23101 after the commencement date of the declared state disaster or emergency, as specified in the Governor’s proclamation of a state of emergency or the President’s declaration of a major disaster or emergency in this state, upon the request of a registered business or by a state agency or a local agency, for the purpose of performing disaster- or emergency-related work.

(8)“Registered business” means a business entity that is registered to do business in this state prior to the commencement date of the declared state disaster or emergency, as specified in the Governor’s proclamation of a state of emergency or the President’s declaration of a major disaster or emergency in this state.

(9)“State agency” means a state agency as defined in Section 8680.8 of the Government Code.

(c) An exemption shall not be allowed under this section unless the purchaser furnishes the retailer with an exemption certificate, completed in accordance with any instructions or regulations as the board may prescribe, and the retailer retains the exemption certificate in its records and furnishes the exemption certificate to the board upon request. The exemption certificate shall contain the sales price of the qualified tangible personal property.

SEC. 3.

 Section 17137 is added to the Revenue and Taxation Code, to read:

17137.
 (a) For taxable years beginning on and after January 1, 2015, gross income shall not include any amount received by a qualified person taxpayer for the performance of disaster- or emergency-related work in this state that is performed during the disaster period.
(b) For purposes of this section, all of the following shall apply:
(1) “Declared state disaster or emergency” means a disaster or emergency event for which the Governor has proclaimed a state of emergency or a major disaster or emergency for which the President of the United States has declared to exist in this state.
(2) “Disaster- or emergency-related work” means repairing, renovating, installing, building, or rendering services or other business activities that relate to infrastructure that has been damaged, impaired, or destroyed as a result of a declared state disaster or emergency.
(3) “Disaster period” means the period of time that begins no later than 10 days following the Governor’s proclamation of a state of emergency or the President’s declaration of a major disaster or emergency in this state, whichever occurs first, and that extends for a period of 60 calendar days following the termination of the declared disaster or emergency as proclaimed or for any period determined by the Governor or by concurrent resolution by the Legislature pursuant to Section 8629 of the Government Code or the President of the United States, whichever occurs first his or her designee.
(4) “Infrastructure” means property and equipment owned or used by communication networks, gas and electric distribution systems, water pipelines, and public roads and bridges, and related support facilities that service multiple customers or citizens, including, but not limited to, real and personal property, including buildings, offices, power lines, poles, pipes, structures, and equipment.
(5) “Local agency” means a local agency as defined in Section 8680.2 of the Government Code.
(6) “Qualified person” taxpayer” means a limited partnership, limited liability partnership, and limited liability company that meets both of the following:
(A) Prior to the commencement date of the declared state disaster or emergency, as specified in the Governor’s proclamation of a state of emergency or the President’s declaration of a major disaster or emergency in this state, was not doing business in this state as defined in Section 23101.
(B) Is doing business in this state as defined in Section 23101 after the commencement date of the declared state disaster or emergency, as specified in the Governor’s proclamation of a state of emergency or the President’s declaration of a major disaster or emergency in this state, upon the request of a registered business or by a state agency or a local agency, for the purpose of performing disaster- or emergency-related work.

(7)“Registered business” means a business entity that is registered to do business in this state prior to the commencement date of the declared state disaster or emergency, as specified in the Governor’s proclamation of a state of emergency or the President’s declaration of a major disaster or emergency in this state.

(8)“State agency” means a state agency as defined in Section 8680.8 of the Government Code.

SEC. 4.

 Section 24311 is added to the Revenue and Taxation Code, to read:

24311.
 (a) For taxable years beginning on and after January 1, 2015, gross income shall not include any amount received by a qualified person taxpayer for the performance of disaster- or emergency-related work in this state that is performed during the disaster period.
(b) For purposes of this section, all of the following shall apply:
(1) “Declared state disaster or emergency” means a disaster or emergency event for which the Governor has proclaimed a state of emergency or a major disaster or emergency for which the President of the United States has declared to exist in this state.
(2) “Disaster- or emergency-related work” means repairing, renovating, installing, building, or rendering services or other business activities that relate to infrastructure that has been damaged, impaired, or destroyed as a result of a declared state disaster or emergency.
(3) “Disaster period” means the period of time that begins no later than 10 days following the Governor’s proclamation of a state of emergency or the President’s declaration of a major disaster or emergency in this state, whichever occurs first, and that extends for a period of 60 calendar days following the termination of the declared disaster or emergency as proclaimed or for any period determined by the Governor or by concurrent resolution by the Legislature pursuant to Section 8629 of the Government Code or the President of the United States, whichever occurs first his or her designee.
(4) “Infrastructure” means property and equipment owned or used by communication networks, gas and electric distribution systems, water pipelines, and public roads and bridges, and related support facilities that service multiple customers or citizens, including, but not limited to, real and personal property, including buildings, offices, power lines, poles, pipes, structures, and equipment.
(5) “Local agency” means a local agency as defined in Section 8680.2 of the Government Code.
(6) “Qualified person” taxpayer” means a corporation that meets all of the following:
(A) Prior to the commencement date of the declared state disaster or emergency, as specified in the Governor’s proclamation of a state of emergency or the President’s declaration of a major disaster or emergency in this state, was not doing business in this state as defined in Section 23101.
(B) Is doing business in this state as defined in Section 23101 after the commencement date of the declared state disaster or emergency, as specified in the Governor’s proclamation of a state of emergency or the President’s declaration of a major disaster or emergency in this state, upon the request of a registered business or by a state agency or a local agency, for the purpose of performing disaster- or emergency-related work.

(7)“Registered business” means a business entity that is registered to do business in this state prior to the commencement date of the declared state disaster or emergency, as specified in the Governor’s proclamation of a state of emergency or the President’s declaration of a major disaster or emergency in this state.

(8)“State agency” means a state agency as defined in Section 8680.8 of the Government Code.

SEC. 5.

 Notwithstanding Section 2230 of the Revenue and Taxation Code, no appropriation is made by this act and the state shall not reimburse any local agency for any sales and use tax revenues lost by it under this act.

SEC. 6.

 This act provides for a tax levy within the meaning of Article IV of the Constitution and shall go into immediate effect.