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AB-1569 Sales and use tax: medicinal cannabis: veterans.(2019-2020)

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Date Published: 04/22/2019 09:00 PM
AB1569:v96#DOCUMENT

Amended  IN  Assembly  April 22, 2019
Amended  IN  Assembly  April 08, 2019
Amended  IN  Assembly  March 28, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 1569


Introduced by Assembly Member Jones-Sawyer

February 22, 2019


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 1569, as amended, Jones-Sawyer. Sales and use tax: medicinal cannabis: veterans.
The Control, Regulate and Tax Adult Use of Marijuana Act (AUMA), an initiative measure approved as Proposition 64 at the November 8, 2016, statewide general election, authorizes a person who obtains a state license under AUMA to engage in commercial adult-use cannabis activity pursuant to that license and applicable local ordinances. The Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), among other things, consolidates the licensure and regulation of commercial medicinal and adult-use cannabis activities.
Existing state 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 of, state or on the storage, use, or other consumption in this state of, of tangible personal property purchased from a retailer for storage, use, or other consumption in this state. The Sales and Use Tax Law provides various exemptions from those taxes. AUMA provides an exemption from those taxes for retail sales of certain medicinal cannabis and medical cannabis products when a qualified patient or primary caregiver for a qualified patient provides a specified medicinal cannabis identification card and a valid state government-issued identification card.
This bill, on or after January 1, 2020, and until January 1, 2030, would provide an exemption from those taxes for the sale of, or the storage, use, or other consumption in this state of, medicinal cannabis or medicinal cannabis product purchased by a qualified patient or a primary caregiver of a qualified patient from a medicinal cannabis licensee if that qualified patient or primary caregiver provides an attending physician’s recommendation, a valid state government-issued identification card, and a specified Veteran Health Identification Card.
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 laws authorize districts, as specified, to impose transactions and use taxes in accordance with the Transactions and Use Tax Law, which generally conforms to the Sales and Use Tax Law. Amendments to the Sales and Use Tax Law are automatically incorporated into the local tax laws.
Existing law requires the state to 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 bill would take effect immediately as a tax levy.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   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) Beginning on and after January 1, 2020, 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, medicinal cannabis or medicinal cannabis product purchased by a qualified patient or a primary caregiver of a qualified patient from a medicinal cannabis licensee if that qualified patient or primary caregiver provides an attending physician’s recommendation for that qualified patient, a valid state government-issued identification card for that qualified patient, and a valid Veteran Health Identification Card for that qualified patient.
(b) For purposes of this section, all of the following terms shall apply:
(1) “Attending physician” shall have the same meaning as in Section 11362.7 of the Health and Safety Code.
(2) “Licensee” shall have the same meaning as in Section 26001 of the Business and Professions Code.
(3) “Medicinal cannabis” and “medicinal cannabis product” shall have the same meaning as in Section 26001 of the Business and Professions Code.
(4) “Physician’s recommendation” means a recommendation by a physician and surgeon that a patient use cannabis provided in accordance with the Compassionate Use Act of 1996 (Proposition 215), found at Section 11362.5 of the Health and Safety Code.
(5) “Primary caregiver” shall have the same meaning as in Section 11362.7 of the Health and Safety Code.
(6) “Qualified patient” shall have the same meaning as in Section 11362.7 of the Health and Safety Code.
(7) “Veteran Health Identification Card” means a valid Veteran Health Identification Card (VHIC) issued by the federal Department of Veteran Affairs with a service connected disability rating displayed on the identification card.
(c) This section shall become inoperative on January 1, 2030.

SEC. 2.

 (a) It is the intent of the Legislature to apply the requirements of Section 41 of the Revenue and Taxation Code to the sales and use tax exemption provided by Section 6377 of the Revenue and Taxation Code, as proposed to be added by Section 1 of this act.
(b) The primary goal of the sales and use tax exemption provided by Section 6377 of the Revenue and Taxation Code, as proposed to be added by Section 1 of this act, is to increase the sales of the licensed regulated cannabis market by incentivizing veterans with a medical condition to purchase cannabis products in the legal market.
(c) Success of the sales and use tax exemption provided by Section 6377 of the Revenue and Taxation Code, as proposed to be added by Section 1 of this act, shall be measured by the increase in the following metrics:
(1) The total annual and quarterly sales by retailers of medicinal cannabis or medicinal cannabis products.
(2) The annual number of sales and use tax exemptions taken pursuant to Section 6377 of the Revenue and Taxation Code, as proposed to be added by Section 1 of this act.
(d) The California Department of Tax and Fee Administration shall have the following data collection and reporting requirements:
(1) The total annual and quarterly sales by retailers of medicinal cannabis or medicinal cannabis products.
(2) The annual number of sales and use tax exemptions taken pursuant to Section 6377 of the Revenue and Taxation Code, as proposed to be added by Section 1 of this act.
(e) This section shall become inoperative on January 1, 2031.

SEC. 2.SEC. 3.

 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. 3.SEC. 4.

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