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AB-66 Sales and use taxes: exemption: diapers.(2019-2020)

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Date Published: 04/30/2019 09:00 PM
AB66:v96#DOCUMENT

Amended  IN  Assembly  April 30, 2019
Amended  IN  Assembly  April 22, 2019
Amended  IN  Assembly  March 04, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill No. 66


Introduced by Assembly Member Gonzalez
(Principal coauthor: Assembly Member Gipson)
(Coauthors: Assembly Members Boerner Horvath, Choi, Diep, Eduardo Garcia, Lackey, Mathis, McCarty, Patterson, Robert Rivas, Blanca Rubio, and Voepel)
(Coauthors: Senators Chang, Nielsen, Wieckowski, and Wiener)

December 03, 2018


An act to add and repeal Section 6363.9 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


AB 66, as amended, Gonzalez. Sales and use taxes: exemption: diapers.
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. The Sales and Use Tax Law provides various exemptions from those taxes.
This bill, until January 1, 2025, would exempt from those taxes the gross receipts from the sale in this state of, and the storage, use, or other consumption in this state of, diapers for infants and toddlers.
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, but its operative date would depend on its effective date.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 6363.9 is added to the Revenue and Taxation Code, to read:

6363.9.
 (a) 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, diapers designed, manufactured, processed, fabricated, or packaged for use by infants and toddlers.
(b) This section shall become inoperative on January 1, 2025, and as of that date is repealed.

SEC. 2.

 (a) It is the intent of the Legislature to apply the requirements of Section 41 of the Revenue and Taxation Code to this act.
(b) With respect to Section 6363.9 of the Revenue and Taxation Code, as added by this act, the Legislature finds and declares the following:
(1) The specific goals, purposes, and objectives of this act are as follows:
(A) To correctly treat diapers as necessary health products under the sales and use tax laws, which exempt items deemed “necessities of life,” such as food and medicine.
(B) To promote public health by expanding access to diapers, which, if left on a child when dirty, can cause painful diaper rash, blisters, skin infections, and infections.
(2) (A) To measure the goals set forth in paragraph (1), the Legislative Analyst’s Office shall review the effectiveness of the tax exemption and may request information from the California Department of Tax and Fee Administration and any other relevant state government entity.
(B) On or before January 1, 2024, the Legislative Analyst’s Office shall submit a report, in compliance with Section 9795 of the Government Code, of the review completed pursuant to subparagraph (A) to the Assembly Committee on Revenue and Taxation and to the Senate Governance and Finance Committee. The report shall include, but is not limited to, all of the following:
(i) A recommendation on whether the exemption should be modified, extended, or allowed to become inoperative.
(ii) An assessment on whether more targeted approaches to providing families in need with adequate access to diapers are available.

(B)

(C) The California Department of Tax and Fee Administration and any other relevant state government entity shall provide to the Legislative Analyst’s Office any data requested by the Legislative Analyst’s Office pursuant to this paragraph.

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. 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.