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AB-1223 Firearms and ammunition: excise tax.(2021-2022)

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Date Published: 02/19/2021 09:00 PM
AB1223:v99#DOCUMENT

Revised  April 07, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 1223


Introduced by Assembly Member Levine
(Coauthor: Assembly Member Wicks)

February 19, 2021


An act to amend Section 14132 of, and to add Section 14131.5 to, the Penal Code, and to add and repeal Part 16 (commencing with Section 36001) of Division 2 of the Revenue and Taxation Code, relating to firearms, and making an appropriation therefor.


LEGISLATIVE COUNSEL'S DIGEST


AB 1223, as introduced, Levine. Firearms and ammunition: excise tax.
Existing law establishes the California Violence Intervention and Prevention (CalVIP) Grant Program, administered by the Board of State and Community Corrections, to award competitive grants for the purpose of violence intervention and prevention. Existing law repeals the program on January 1, 2025.
Existing law imposes various taxes, including taxes on the privilege of engaging in certain activities. The Fee Collection Procedures Law, the violation of which is a crime, provides procedures for the collection of certain fees and surcharges.
This bill would, until January 1, 2028, impose an excise tax on a retailer in the amount of $25 per firearm on the sale in this state of a handgun or semiautomatic rifle or shotgun sold as new, as provided, and an excise tax on a retailer in the amount of ___% of the gross receipts from any sale of ammunition. The tax would be collected by the state pursuant to the Fee Collection Procedures Law. The bill would require that the revenues collected be deposited in the CalVIP Firearm and Ammunition Tax Fund, which the bill would create. The bill would continuously appropriate moneys in that fund to the Board of State and Community Corrections to provide CalVIP grants, thereby making an appropriation.
The bill would also extend the operation of the CalVIP program until January 1, 2028.
This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII   A of the California Constitution, and thus would require for passage the approval of 2/3 of the membership of each house of the Legislature.
Because this bill would expand the scope of the Fee Collection Procedures Law, the violation of which is a crime, this bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: 2/3   Appropriation: YES   Fiscal Committee: YES   Local Program: YES  

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


SECTION 1.

 The Legislature hereby finds and declares all of the following:
(a) Firearms sold by gun dealers contribute to unacceptably high rates of gun violence in communities across California. Dealers are the leading source of firearms trafficked to illegal markets, often through straw purchases as well as preventable losses or thefts. Data from the federal Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) indicates that from 2016 to 2018 alone, licensed dealers in California reported losing track of nearly 1,200 firearms from their inventories. The true number of these misplaced firearms, including unreported losses, is likely substantially higher.
(b) Federal law broadly immunizes firearm dealers from civil liability for a wide range of conduct that contributes to death, injury, and other social harms in our state. Essentially no other industry enjoys such a sweeping degree of immunity from civil claims that may incentivize safe and responsible commercial activity. Dealers may also frequently evade other forms of accountability for behaviors that threaten public health and safety. According to a 2013 report by the United States Department of Justice Inspector General, for instance, 38 percent to 53 percent of dealers inspected by ATF from 2004 to 2011 were found to be operating in violation of federal laws “that ban sales to prohibited persons and require inventory and sales to be tracked.” Very few faced any substantial civil or criminal consequences.
(c) Gun dealers’ products, including ammunition, impose enormous fiscal burdens on California’s taxpayers, including an estimated $1.4 billion each year for direct public expenditures such as law enforcement, courts, and health care costs in response to firearm deaths and injuries in our state. This estimate does not include other major expenses, such as crime victim compensation, substantially diminished tax revenue due to lost income, depreciated property values, and reduced business activity associated with gun deaths and injuries in California.
(d) In recent years, gun sales have been booming in California. The California Department of Justice processed between 880,000 and 1,330,000 dealer records of sale per year between 2015 and 2017, up from 344,000 to 375,000 from 2005 to 2007, just one decade earlier.
(e) At the same time, large spikes in gun violence at the national level have also impacted our state. From 2014 to 2017, gun murder rates rose by 16 percent in California, even as there was no such increase among homicides not involving firearms.
(f) The excise tax on firearm retailers proposed in this bill is analogous to the Federal Aid in Wildlife Restoration Act, commonly called the Pittman-Robertson Act, which imposes a 10 to 11 percent federal tax on the sale of guns and ammunition by manufacturers, producers, and importers. Revenues from the Pittman-Robertson tax, which has been described as a “legislative model” by the National Rifle Association, fund wildlife conservation efforts that remediate the effects firearms have on wildlife populations through game hunting.
(g) The purpose of this act is to similarly place a reasonable tax on the firearm industry’s activities in order to fund programs to remediate the devastating effects firearms cause many families and communities across our state. This act is not intended to penalize firearm and ammunition sellers or otherwise discourage lawful firearm and ammunition sales and commerce whatsoever, but is intended to fairly generate revenue to fund CalVIP programs that are targeted and effective at mitigating the harms that firearms too often cause.
(h) The CalVIP grant program funds evidence-based violence reduction initiatives that alleviate the societal harms caused by firearms in communities that are disproportionately impacted by gun violence.

SEC. 2.

 Section 14131.5 is added to the Penal Code, to read:

14131.5.
 There is hereby established in the State Treasury the CalVIP Firearm and Ammunition Tax Fund to receive moneys pursuant to Section 36041 of the Revenue and Taxation Code. Notwithstanding Section 13340 of the Government Code, all moneys in the CalVIP Firearm and Ammunition Tax Fund are continuously appropriated without regard to fiscal years to the Board of State and Community Corrections for the purpose of funding grants in accordance with this title.

SEC. 3.

 Section 14132 of the Penal Code is amended to read:

14132.
 This title shall remain in effect only until January 1, 2025, 2028, and as of that date is repealed.

SEC. 4.

 Part 16 (commencing with Section 36001) is added to Division 2 of the Revenue and Taxation Code, to read:

PART 16. FIREARM AND AMMUNITION TAX LAW

CHAPTER  1. General Provisions and Definitions

36001.
 This part shall be known, and may be cited, as the Firearm and Ammunition Tax Law.

36002.
 For purposes of this part:
(a) “Ammunition” means a loaded cartridge consisting of a primed case, propellant, and one or more projectiles capable of being fired from a firearm. “Ammunition” includes reloaded ammunition. “Ammunition” does not include blanks.
(b) “Antique firearm” means any firearm not designed or redesigned for using rimfire or conventional center fire ignition with fixed ammunition and manufactured in or before 1898. This includes any matchlock, flintlock, percussion cap, or similar type of ignition system, or any replica thereof, whether actually manufactured before or after the year 1898, or any firearm manufactured in or before 1898 that uses fixed ammunition no longer manufactured in the United States and not readily available in the ordinary channels of commercial trade.
(c) “Department” means the California Department of Tax and Fee Administration.
(d) “Firearm” means a device, designed to be used as a weapon, from which is expelled through a barrel, a projectile by the force of an explosion or other form of combustion. “Firearm” includes only any handgun, semiautomatic shotgun, or semiautomatic rifle. “Firearm” does not include an antique firearm.
(e) “Handgun” means any pistol, revolver, or firearm capable of being concealed upon the person.
(f) “Law enforcement agency” means any department or agency of the state or of any county, city, or other political subdivision thereof that employs any peace officer that is authorized to carry a firearm while on duty, or any department or agency of the federal government or a federally recognized Indian tribe with jurisdiction that has tribal land in California, that employs any police officer or criminal investigator authorized to carry a firearm while on duty.
(g) “Peace officer” means any person described in Chapter 4.5 (commencing with Section 830) of Title 3 of Part 2 of the Penal Code that is authorized to carry a firearm on duty, or any police officer or criminal investigator employed by the federal government or a federally recognized Indian tribe with jurisdiction that has tribal land in California, that is authorized to carry a firearm while on duty.
(h) “Retailer” means any person that is engaged in the business of making retail sales of goods, including firearms and ammunition, to the general public.
(i) “Semiautomatic” refers to a firearm that uses the energy of the explosive in a fixed cartridge to extract a fired cartridge and chamber a fresh cartridge with each single pull of the trigger. “Semiautomatic” does not include a pump, bolt, or lever action shotgun or rifle.
(j) “Sold as new” refers to a firearm sold by a retailer that has not previously been purchased for any purpose other than for resale.

36003.
 This part shall remain in effect only until January 1, 2028, and as of that date is repealed.

CHAPTER  2. Imposition of Tax

36011.
 An excise tax is hereby imposed on every retailer upon the sale in this state of a firearm sold as new at the rate of twenty-five dollars ($25) per firearm.

36012.
 An excise tax is hereby imposed on every retailer upon the sale in this state of ammunition sold at retail at the rate of ___ percent of the gross receipts of each ammunition sale.

CHAPTER  3. Exemptions

36021.
 There are exempted from the taxes imposed by this part, the sale of any firearm or ammunition purchased by any peace officer or by any law enforcement agency employing that peace officer, for use in the normal course of employment.

CHAPTER  4. Collection and Administration

36031.
 The department shall administer and collect the taxes imposed by this part pursuant to the Fee Collection Procedures Law (Part 30 (commencing with Section 55001)). For purposes of this part, the references in the Fee Collection Procedures Law to “fee” shall include the taxes imposed by this part and references to “feepayer” shall mean any person liable for the payment of the taxes imposed under this part and collected pursuant to that law.

36032.
 The taxes imposed by this part are due and payable to the department quarterly on or before the last day of the month next succeeding each quarterly period of three months.

36033.
 On or before the last day of the month following each quarterly period, a return for the preceding quarterly period shall be filed with the department.

CHAPTER  5. Disposition of Proceeds

36041.
 All amounts required to be paid pursuant to Section 36011 and 36012 shall be paid to the department in the form of remittances payable to the department, and those revenues, net of refunds and costs of administration, shall be deposited in the CalVIP Firearm and Ammunition Tax Fund, established pursuant to Section 14131.5 of the Penal Code.

SEC. 5.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.
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REVISIONS:
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