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SB-38 Sales and use taxes: consumer designation: all volunteer fire department.(2019-2020)

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Date Published: 01/06/2020 09:00 PM
SB38:v97#DOCUMENT

Amended  IN  Senate  January 06, 2020
Amended  IN  Senate  May 17, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Senate Bill
No. 38


Introduced by Senators Hill, Glazer, McGuire, and Portantino Senator Hill
(Principal coauthors: Assembly Members McCarty and Wood)(Coauthors: Senators Allen, Beall, Leyva, Skinner, and Wiener McGuire and Nielsen)
(Coauthors: Assembly Members Berman, Bloom, Cristina Garcia, Muratsuchi, O’Donnell, Mark Stone, and Ting)

December 03, 2018


An act to add Division 8.7 (commencing with Section 22995) to the Business and Professions Code, relating to tobacco products. amend Section 6018.10 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


SB 38, as amended, Hill. Flavored tobacco products. Sales and use taxes: consumer designation: all volunteer fire department.
Existing sales and use tax laws, among other things, impose a tax on retailers measured by the gross receipts from their sales of tangible personal property sold at retail in this state. The Sales and Use Tax Law designates that certain sellers of tangible personal property are consumers, and not retailers, of the tangible personal property they sell, including, until January 1, 2021, that an all volunteer fire department, as defined, is a consumer, and not a retailer, of all tangible personal property sold by it, if the profits are used solely and exclusively in furtherance of the purposes of the all volunteer fire department, subject to specified limitations, so that the retail sale subject to tax is the sale of tangible personal property to the all volunteer fire department.
This bill would remove the repeal date of January 1, 2021, thereby extending the operation of that consumer designation for all volunteer fire departments indefinitely.
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.

Existing law, the Stop Tobacco Access to Kids Enforcement (STAKE) Act, prohibits a person from selling or otherwise furnishing tobacco products, as defined, to a person under 21 years of age. Existing law authorizes specified enforcing agencies to assess civil penalties for violations of the STAKE Act.

This bill would prohibit a tobacco retailer from selling, offering for sale, or possessing with the intent to sell or offer for sale, a flavored tobacco product, as defined. The bill would exclude from its provisions a product that has a patent issued prior to January 1, 2000, and is not a menthol flavored product, and tobacco products designed for a nonelectronic hookah. The bill would authorize an enforcing agency to assess civil penalties under the STAKE Act for a violation of this prohibition. The bill would state the intent of the Legislature that these provisions not be construed to preempt or prohibit the adoption and implementation of local ordinances related to the prohibition on the sale of flavored tobacco products. The bill would state that its provisions are severable.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 6018.10 of the Revenue and Taxation Code is amended to read:

6018.10.
 (a) An all volunteer fire department is a consumer of, and shall not be considered a retailer within the provisions of this part of all tangible personal property sold by it, including, but not limited to, hot prepared food products and clothing, if the profits are used solely and exclusively in furtherance of the purposes of the all volunteer fire department.
(b) For purposes of this section, an “all volunteer fire department” means an organization that meets all of the following requirements:
(1) No member shall be paid a regular salary, but a member may be compensated on an hourly or per incident basis.
(2) The purpose of the organization is to protect the lives, property, and environment within a designated geographical area from fires, disasters, and emergency incidents through education, prevention, training, and emergency response.
(3) The organization is regularly organized for volunteer fire department purposes and qualifies as an exempt organization, either under Section 23701d or 23701f of this code or under Section 501(c)(3) or 501(c)(4) of the Internal Revenue Code, having official recognition and full or partial support of the government of the county, city, or district in which the volunteer fire department is located, and that has functions having an exclusive connection with the prevention and extinguishing of fires within the area of the county, city, or district extending official recognition for the benefit of the public generally and to lessen the burdens of the entity of government that would otherwise be obligated to furnish that fire protection.
(c) This section shall not apply if an all volunteer fire department, in each of the two preceding calendar years, has gross receipts from the sale of tangible personal property of one hundred thousand dollars ($100,000) or more.

(d)This section shall remain in effect only until January 1, 2021, and as of that date is repealed.

SEC. 2.

 The requirements of Section 41 of the Revenue and Taxation Code shall not apply to Section 1 of this act.

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.
SECTION 1.Division 8.7 (commencing with Section 22995) is added to the Business and Professions Code, to read:
8.7.Prohibition on the Sale of Flavored Tobacco Products
22995.

For purposes of this division, the following definitions apply:

(a)“Characterizing flavor” means any distinguishable taste or aroma, or both, other than the taste or aroma of tobacco, imparted by a tobacco product or any byproduct produced by the tobacco product. Characterizing flavors include, but are not limited to, tastes or aromas relating to any fruit, chocolate, vanilla, honey, candy, cocoa, dessert, alcoholic beverage, menthol, mint, wintergreen, herb, or spice. A tobacco product shall not be determined to have a characterizing flavor solely because of the use of additives or flavorings or the provision of ingredient information. Rather, it is the presence of a distinguishable taste or aroma, or both, as described in the first sentence of this definition, that constitutes a characterizing flavor.

(b)“Constituent” means any ingredient, substance, chemical, or compound, other than tobacco, water, or reconstituted tobacco sheet, that is added by the manufacturer to a tobacco product during the processing, manufacture, or packing of the tobacco product.

(c)“Enforcing agency” means the State Department of Public Health, another state agency, including, but not limited to, the office of the Attorney General, or a local law enforcement agency, including, but not limited to, a city attorney, district attorney, or county counsel.

(d)“Flavored tobacco product” means any tobacco product that contains a constituent that imparts a characterizing flavor, except for tobacco products designed for a nonelectronic hookah.

(e)“Labeling” means written, printed, pictorial, or graphic matter upon a tobacco product or any of its packaging.

(f)“Packaging” means a pack, box, carton, or container of any kind, or, if no other container, any wrapping, including cellophane, in which a tobacco product is sold or offered for sale to a consumer.

(g)“Retail location” means both of the following:

(1)A building from which tobacco products are sold at retail.

(2)A vending machine.

(h)“Sale” or “sold” means a sale as defined in Section 30006 of the Revenue and Taxation Code.

(i)“Tobacco product” means a product that meets both of the following requirements:

(1)The product either does not have a patent issued prior to January 1, 2000, or is a menthol flavored product.

(2)The product is a tobacco product as defined in paragraph 8 of subdivision (a) of Section 104495 of the Health and Safety Code, as that provision may be amended from time to time.

(j)“Tobacco retailer” means a person who engages in this state in the sale of tobacco products directly to the public from a retail location. “Tobacco retailer” includes a person who operates vending machines from which tobacco products are sold in this state.

22996.

(a)A tobacco retailer, or any of the tobacco retailer’s agents or employees, shall not sell, offer for sale, or possess with the intent to sell or offer for sale, a flavored tobacco product.

(b)There shall be a rebuttable presumption that a tobacco product is a flavored tobacco product if a manufacturer or any of the manufacturer’s agents or employees, in the course of their agency or employment, has made a statement or claim directed to consumers or to the public that the tobacco product has or produces a characterizing flavor, including, but not limited to, text, color, images, or all, on the product’s labeling or packaging that are used to explicitly or implicitly communicate that the tobacco product has a characterizing flavor.

22997.

An enforcing agency may assess civil penalties in the amounts set forth in subdivision (a) of Section 22958 for a violation of this division.

22998.

This division does not preempt or otherwise prohibit the adoption of a local standard that imposes greater restrictions on the access to tobacco products than the restrictions imposed by this section. To the extent that there is an inconsistency between this division and a local standard that imposes greater restrictions on the access to tobacco products, the greater restriction on the access to tobacco products in the local standard shall prevail.

SEC. 2.

The provisions of this act are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.