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AB-3124 Sales and use tax: medicinal cannabis.(2019-2020)

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Date Published: 02/21/2020 09:00 PM
AB3124:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 3124


Introduced by Assembly Member Lackey

February 21, 2020


An act to add Section 6369.3 to the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


AB 3124, as introduced, Lackey. Sales and use tax: medicinal cannabis.
The Compassionate Use Act of 1996, an initiative measure enacted by the approval of Proposition 215 at the November 5, 1996, statewide general election, prohibits specified criminal penalties from being imposed on a patient or a patient’s primary caregiver who possesses or cultivates cannabis for the personal medical purposes of the patient upon the written or oral recommendation or approval of a physician.
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 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. The Sales and Use Tax Law provides various exemptions from those taxes. The Control, Regulate and Tax Adult Use of Marijuana Act, an initiative measure approved as Proposition 64 at the November 8, 2016, statewide general election, among other things, 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, 2021, 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 if that qualified patient or primary caregiver provides a valid physician’s recommendation and a valid state government-issued identification card for that qualified patient.
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.
Existing law requires a bill that would authorize a new tax expenditure under the Sales and Use Tax Law to identify specific goals, purposes, and objectives that the tax expenditure will achieve, and detailed performance indicators and data collection requirements for determining whether the tax expenditure achieves these goals, purposes, and objectives.
This bill would state the intent of the Legislature to enact legislation that will comply with those new tax expenditure requirements.
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 6369.3 is added to the Revenue and Taxation Code, to read:

6369.3.
 (a) On and after January 1, 2021, 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 if that qualified patient or primary caregiver provides a valid physician’s recommendation for that qualified patient and a valid state government-issued identification card for that qualified patient.
(b) For purposes of this section, all of the following terms shall apply:
(1) “Licensee” shall have the same meaning as in Section 26001 of the Business and Professions Code.
(2) “Medicinal cannabis” and “medicinal cannabis product” shall have the same meaning as in Section 26001 of the Business and Professions Code.
(3) “Physician’s recommendation” means a recommendation by a physician 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.
(4) “Primary caregiver” shall have the same meaning as in Section 11362.7 of the Health and Safety Code.
(5) “Qualified patient” shall have the same meaning as in Section 11362.7 of the Health and Safety Code.

SEC. 2.

 It is the intent of the Legislature to enact legislation that will comply with the requirements of Section 41 of the Revenue and Taxation Code.

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. 4.

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