Today's Law As Amended

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AB-274 Sales and use taxes: exemption: food products.(2017-2018)



SECTION 1.

 Section 6359.05 is added to the Revenue and Taxation Code, to read:

6359.05.
 (a) On and after July 1, 2019, there are exempted from the taxes imposed by this part the gross receipts from the sale of, and the storage, use, or other consumption in this state of, food products for human consumption subject to the taxes imposed by this part pursuant to subdivision (b) of Section 34 of Article XIII of the California Constitution.
(b) Subdivision (a) shall not apply to food products that are candy or confectionery or processed snacks.
(c) For purposes of this section, the following definitions apply:
(1) (A) Except as otherwise provided in subparagraph (B), “candy or confectionery” means all of the following, regardless of whether sold as an ingredient:
(i) Food products with sugar, honey, chocolate, corn syrup, or sugar substitute as the first listed ingredient.
(ii) Food products that are sugared, candied, or covered or coated in caramel, chocolate, honey, sprinkles, or other similar coatings.
(iii) Food products that are labeled or marketed as “candy” or “confectionery.”
(iv) Granola, trail mix, or other mixes that contain food products described in clauses (i) to (iii), inclusive.
(B) “Candy or confectionery” does not include any of the following:
(i) Cereal, cereal bars, protein bars, or meal replacement bars.
(ii) Jams, jellies, or other preserves.
(iii) Maple sugar products, unless labeled or marketed as “candy” or “confectionery.”
(iv) Baked goods.
(v) Food products that require refrigeration.
(vi) Beverages.
(vii) Fruit, unless covered or coated in caramel, chocolate, honey, sprinkles, or other similar coatings.
(2) “Healthy choice snack” means a food product that meets all of the following requirements:
(A) Contains not more than 200 calories per serving.
(B) Not more than 35 percent of its total calories are from fat per serving.
(C) Less than 10 percent of its total calories are from saturated fat per serving.
(D) Not more than 35 percent of its total weight shall be composed of sugar per serving.
(E) Contains no trans fat.
(F) Contains not more than 200 milligrams of sodium per serving.
(3) “Processed snack” means a food product that is ready for consumption without further preparation, not including toasting. “Processed snack” does not include healthy choice snacks, frozen products, fresh or dried fruit or vegetables, unless the fruit or vegetables contain added sugar, dairy products, dairy substitutes, nuts and seeds, nut butters, canned products, bread products, meat products, meat substitutes, prepared food, or beverages.
SEC. 2.
 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.
 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 only if Assembly Constitutional Amendment 2 of the 2017–18 Regular Session is submitted to, and approved by, the voters of California pursuant to subdivision (c) of Section 10 of Article II of the California Constitution, and in that event shall become operative on November 7, 2018.