Code Section Group

Revenue and Taxation Code - RTC

DIVISION 2. OTHER TAXES [6001 - 61045]

  ( Heading of Division 2 amended by Stats. 1968, Ch. 279. )

PART 1.5. UNIFORM LOCAL SALES AND USE TAXES [7200 - 7226]

  ( Part 1.5 added by Stats. 1955, Ch. 1311. )

CHAPTER 1. General Provisions [7200 - 7212]
  ( Chapter 1 heading added by Stats. 1997, Ch. 702, Sec. 3. )

7200.
  

This part is known and may be cited as the “Bradley-Burns Uniform Local Sales and Use Tax Law.”

(Added by Stats. 1955, Ch. 1311.)

7201.
  

Any county may by action of its board of supervisors adopt a sales and use tax in accordance with the provisions of this part.

(Added by Stats. 1955, Ch. 1311.)

7202.
  

The sales tax portion of any sales and use tax ordinance adopted under this part shall be imposed for the privilege of selling tangible personal property at retail, and shall include provisions in substance as follows:

(a) A provision imposing a tax for the privilege of selling tangible personal property at retail upon every retailer in the county at the rate of 11/4 percent of the gross receipts of the retailer from the sale of all tangible personal property sold by that person at retail in the county.

(b) Provisions identical to those contained in Part 1 (commencing with Section 6001), insofar as they relate to sales taxes, except that the name of the county as the taxing agency shall be substituted for that of the state and that an additional seller’s permit shall not be required if one has been or is issued to the seller under Section 6067.

(c) A provision that all amendments subsequent to the effective date of the enactment of Part 1 (commencing with Section 6001) relating to sales tax and not inconsistent with this part, shall automatically become a part of the sales tax ordinance of the county.

(d) A provision that the county shall contract prior to the effective date of the county sales and use tax ordinances with the State Board of Equalization to perform all functions incident to the administration or operation of the sales and use tax ordinance of the county. Any such contract shall contain a provision that the county agrees to comply with the provisions of Article 11 (commencing with Section 29530) of Chapter 2 of Division 3 of Title 3 of the Government Code.

(e) A provision that the ordinance may be made inoperative not less than 60 days, but not earlier than the first day of the calendar quarter, following the county’s lack of compliance with Article 11 (commencing with Section 29530) of Chapter 2 of Division 3 of Title 3 of the Government Code or following an increase by any city within the county of the rate of its sales or use tax above the rate in effect at the time the county ordinance was enacted.

(f) A provision that the amount subject to tax shall not include the amount of any sales tax or use tax imposed by the State of California upon a retailer or consumer.

(g) A provision that there is exempted from the sales tax 80 percent, and on and after July 1, 2004, until the rate modifications in subdivision (a) of Section 7203.1 cease to apply, 75 percent, of the gross receipts from the sale of tangible personal property, other than fuel or petroleum products, to operators of aircraft to be used or consumed principally outside the county in which the sale is made and directly and exclusively in the use of the aircraft as common carriers of persons or property under the authority of the laws of this state, the United States, or any foreign government.

(h) A provision that any person subject to a sales and use tax under the county ordinance shall be entitled to credit against the payment of taxes due under that ordinance the amount of sales and use tax due to any city in the county; provided that the city sales and use tax is levied under an ordinance including provisions in substance as follows:

(1) A provision imposing a tax for the privilege of selling tangible personal property at retail upon every retailer in the city at the rate of 1 percent or less of the gross receipts of the retailer from the sale of all tangible personal property sold by that person at retail in the city and a use tax of 1 percent or less of purchase price upon the storage, use or other consumption of tangible personal property purchased from a retailer for storage, use or consumption in the city.

(2) Provisions identical to those contained in Part 1 (commencing with Section 6001), insofar as they relate to sales and use taxes, except that the name of the city as the taxing agency shall be substituted for that of the state (but the name of the city shall not be substituted for the word “state” in the phrase “retailer engaged in business in this state” in Section 6203 nor in the definition of that phrase in Section 6203) and that an additional seller’s permit shall not be required if one has been or is issued to the seller under Section 6067.

(3) A provision that all amendments subsequent to the effective date of the enactment of Part 1 (commencing with Section 6001) relating to sales and use tax and not inconsistent with this part, shall automatically become a part of the sales and use tax ordinance of the city.

(4) A provision that the city shall contract prior to the effective date of the city sales and use tax ordinance with the State Board of Equalization to perform all functions incident to the administration or operation of the sales and use tax ordinance of the city which shall continue in effect so long as the county within which the city is located has an operative sales and use tax ordinance enacted pursuant to this part.

(5) A provision that the storage, use or other consumption of tangible personal property, the gross receipts from the sale of which has been subject to sales tax under a sales and use tax ordinance enacted in accordance with this part by any city and county, county, or city in this state, shall be exempt from the tax due under this ordinance.

(6) A provision that the amount subject to tax shall not include the amount of any sales tax or use tax imposed by the State of California upon a retailer or consumer.

(7) A provision that there are exempted from the computation of the amount of the sales tax the gross receipts from the sale of tangible personal property to operators of aircraft to be used or consumed principally outside the city in which the sale is made and directly and exclusively in the use of the aircraft as common carriers of persons or property under the authority of the laws of this state, the United States, or any foreign government.

(8) A provision that, in addition to the exemptions provided in Sections 6366 and 6366.1, the storage, use, or other consumption of tangible personal property purchased by operators of aircraft and used or consumed by the operators directly and exclusively in the use of the aircraft as common carriers of persons or property for hire or compensation under a certificate of public convenience and necessity issued pursuant to the laws of this state, the United States, or any foreign government is exempt from the use tax.

(Repealed and added by Stats. 2003, 5th Ex. Sess., Ch. 2, Sec. 4.16. Effective December 12, 2003. Operative March 3, 2004, pursuant to Sec. 8 of Ch. 2.)

7202.5.
  

In addition to the provisions set forth in paragraphs (1) to (8), inclusive, of subdivision (h) of Section 7202, a city, county, or city and county sales and use tax ordinance may provide that any person subject to a sales and use tax under the city's, county's, or city and county’s ordinance shall be entitled to credit against the payment of taxes due under that ordinance the amount of sales and use taxes due to the redevelopment agency pursuant to Section 7202.6.

(Amended by Stats. 1992, Ch. 905, Sec. 3. Effective September 25, 1992. Operative January 1, 1993, by Sec. 8 of Ch. 905.)

7202.8.
  

Any pledge of taxes pursuant to Section 33641 of the Health and Safety Code made with respect to taxes imposed under Section 7202.6 to the payment of principal and interest on bonds of a redevelopment agency shall constitute the obligation of a contract between the redevelopment agency and the holder of the bonds and shall be protected from impairment by the United States and California Constitutions. The provisions of Section 7202.6 which authorize the imposition of the taxes may not be repealed during the time that any of the bonds remain outstanding.

(Added by Stats. 1981, Ch. 951, Sec. 4.)

7203.
  

The use tax portion of any sales and use tax ordinance adopted under this part shall impose a complementary tax upon the storage, use or other consumption in the county of tangible personal property purchased from any retailer for storage, use or other consumption in the county. That tax shall be at the rate of 11/4 percent of the sales price of the property whose storage, use or other consumption is subject to the tax and shall include:

(a) Provisions identical to the provisions contained in Part 1 (commencing with Section 6001), other than Section 6201 insofar as those provisions relate to the use tax, except that the name of the county as the taxing agency enacting the ordinance shall be substituted for that of the state (but the name of the county shall not be substituted for the word “state” in the phrase “retailer engaged in business in this state” in Section 6203 nor in the definition of that phrase in Section 6203).

(b) A provision that all amendments subsequent to the date of such ordinance to the provisions of the Revenue and Taxation Code relating to the use tax and not inconsistent with this part shall automatically become a part of the ordinance.

(c) A provision that the storage, use or other consumption of tangible personal property, the gross receipts from the sale of which has been subject to sales tax under a sales and use tax ordinance enacted in accordance with this part by any city and county, county, or city in this state, shall be exempt from the tax due under this ordinance.

(d) A provision that the amount subject to tax shall not include the amount of any sales tax or use tax imposed by the State of California upon a retailer or consumer.

(e) A provision that, in addition to the exemptions provided in Sections 6366 and 6366.1, the storage, use, or other consumption of tangible personal property, other than fuel or petroleum products, purchased by operators of aircraft and used or consumed by the operators directly and exclusively in the use of the aircraft as common carriers of persons or property for hire or compensation under a certificate of public convenience and necessity issued pursuant to the laws of this state, the United States or any foreign government is exempt from 80 percent of the use tax, and on and after July 1, 2004, until the rate modifications in subdivision (a) of Section 7203.1 cease to apply, exempt from 75 percent of the use tax.

(Repealed and added by Stats. 2003, 5th Ex. Sess., Ch. 2, Sec. 4.18. Effective December 12, 2003. Operative March 3, 2004, pursuant to Sec. 8 of Ch. 2.)

7203.1.
  

(a) Notwithstanding any other provision of law, during the revenue exchange period only, the authority of a county or a city under this part to impose a tax rate as specified in an ordinance adopted pursuant to Sections 7202 and 7203 is suspended, and the tax rate to be applied instead during that period under any ordinance as so adopted is the applicable of the following:

(1) In the case of a county, 1 percent.

(2) In the case of a city, three-quarters of 1 percent or less.

(b) For purposes of this section, “revenue exchange period” means the period on and after July 1, 2004, and before the first day of the first calendar quarter commencing more than 90 days following a notification to the board by the Director of Finance pursuant to subdivision (b) of Section 99006 of the Government Code.

(c) Subdivision (a) is a self-executing provision that operates without regard to any decision or act on the part of any local government. A change in a local general tax rate resulting from either the rate limitations applied by subdivision (a) or the end of the revenue exchange period is not subject to voter approval under either statute or Article XIII C of the California Constitution.

(d) Existing tax exchange or revenue sharing agreements, entered into prior to the operative date of this section, between local agencies or between local agencies and nonlocal agencies shall be deemed to be temporarily modified to account for the reduction in sales and use tax revenues resulting from this section, with those reduced revenues to be replaced as may otherwise be provided by law.

(Amended (as amended by Stats. 2004, Ch. 211) by Stats. 2004, Ch. 610, Sec. 10. Effective September 20, 2004. Note: The revenue period specified in subds. (a) and (b) ended on Jan. 1, 2016, pursuant to issuance of the notification described in subd. (b) of GOV Section 99006.)

7203.2.
  

The sales and use tax ordinance of a county, city, city and county, or redevelopment agency adopted pursuant to this part, shall be deemed to adopt by reference the provisions of Sections 7202 to 7203, inclusive, as now in effect or as later amended, which are required to be included in the ordinance, regardless of whether or not the ordinance was adopted or amended, prior to or after the effective date of this section.

(Added by Stats. 1985, Ch. 591, Sec. 8.)

7203.5.
  

The State Board of Equalization shall not administer and shall terminate its contract to administer any sales or use tax ordinance of a city, county, redevelopment agency, or city and county, if such city, county, redevelopment agency, or city and county imposes a sales or use tax in addition to the sales and use taxes imposed under an ordinance conforming to the provisions of Sections 7202 and 7203.

The board shall give such city, county, redevelopment agency, or city and county written notice of termination, stating the reasons therefor and the effective date of the termination, which shall be not earlier than the first day of the first calendar quarter commencing at least 30 days after the mailing of the notice to the city, county, redevelopment agency, or city and county. If the cause for termination is not cured within the time specified in the notice, the board shall not administer the ordinance until the cause for termination is removed and a new contract for the administration of the ordinance executed. Such contract shall be operative not earlier than the first day of the first calendar quarter commencing after its execution. During the period of time that the board is not administering the sales and use tax ordinance of a city, county, redevelopment agency, or city and county, no ordinance of such city, county, redevelopment agency, or city and county shall be considered to be an ordinance enacted in accordance with this part.

Nothing in this section shall be construed as prohibiting the levy or collection by a city, county, redevelopment agency, or city and county of any other substantially different tax authorized by the Constitution of California or by statute or by the charter of any chartered city.

(Amended by Stats. 1981, Ch. 951, Sec. 5. Superseded on operative date of amendment by Stats. 1996, Ch. 940.)

7203.5.
  

(a) The State Board of Equalization shall not administer and shall terminate its contract to administer any sales or use tax ordinance of a city, county, or city and county, if that city, county, or city and county imposes a sales or use tax in addition to the sales and use taxes imposed under an ordinance conforming to the provisions of Sections 7202 and 7203.

(b) For purposes of this section, and notwithstanding subdivision (f), a city, county, or city and county shall be deemed to have imposed a sales or use tax in addition to the sales and use taxes imposed under an ordinance conforming to the provisions of Sections 7202 and 7203 to the extent that the city, county, or city and county levies a tax on the privilege of occupying a room or rooms in a hotel, motel, bed and breakfast inn, or similar transient lodging establishment when all of the following conditions are met:

(1) The hotel, motel, bed and breakfast inn, or similar transient lodging establishment provides food products for human consumption and all or some of the food products are provided solely for consumption by its transient guests and the invitees of those guests.

(2) The uniform cost of the food products provided solely for consumption by the establishment’s transient guests and the invitees of those guests is included in the price of the transient occupancy accommodation, however denominated, and whether or not separately stated.

(3) The portion of the price of the transient occupancy accommodation allocable to these food products is subject to tax under Part 1 (commencing with Section 6001), and is also subject to tax imposed by the city, county, or city and county on the privilege of occupying a room or rooms in the establishment.

(4) The operator of the establishment provides the city, county, or city and county with a reasonable allocation of the value of the food products subject to tax under Part 1 (commencing with Section 6001) that is separately identified either on the guest’s receipt or on the operator’s accounting records.

(c) The provisions of subdivision (a) shall apply to any tax described in subdivision (b), whether characterized as a “transient occupancy tax,” “bed tax,” or otherwise, regardless of whether it is levied pursuant to Section 7280, pursuant to charter or other similar authority of the city, county, or city and county, or otherwise pursuant to law.

(d) (1) For purposes of this section, “hotel,” “motel,” “bed and breakfast inn,” or “similar transient lodging establishment” means an establishment containing guest room accommodations with respect to which the predominant relationship existing between the occupants thereof and the owner or operator of the establishment is that of innkeeper and guest. The existence of other relationships as between some occupants and the owner or operator thereof shall be immaterial.

(2) For purposes of this section, “food products” means food and beverage products of every kind, regardless of how or where served, and shall specifically include, but not be limited to, alcoholic beverages and carbonated beverages of every kind.

(e) In the case of a termination, the board shall give the city, county, or city and county written notice of termination, stating the reasons therefor and the effective date of the termination, which shall be not earlier than the first day of the first calendar quarter commencing at least 30 days after the mailing of the notice to the city, county, or city and county. If the cause for termination is not cured within the time specified in the notice, the board shall not administer the ordinance until the cause for termination is removed and a new contract for the administration of the ordinance executed. The contract shall be operative not earlier than the first day of the first calendar quarter commencing after its execution. During the period of time that the board is not administering the sales and use tax ordinance of a city, county, or city and county, no ordinance of that city, county, or city and county shall be considered to be an ordinance enacted in accordance with this part.

(f) Except as provided in subdivision (b), nothing in this section shall be construed as prohibiting the levy or collection by a city, county, or city and county of any other substantially different tax authorized by the California Constitution or by statute or by the charter of any chartered city.

(Amended by Stats. 1996, Ch. 940, Sec. 1. Effective January 1, 1997. Conditionally operative as prescribed by Sec. 4 of Ch. 940.)

7204.
  

All sales and use taxes collected by the State Board of Equalization pursuant to contract with any city, city and county, redevelopment agency, or county shall be transmitted by the board to such city, city and county, redevelopment agency, or county periodically as promptly as feasible. The transmittals required under this section shall be made at least twice in each calendar quarter.

(Amended by Stats. 1981, Ch. 951, Sec. 6.)

7204.03.
  

(a) Notwithstanding any other provision of this part, in the case of retail sales of jet fuel that are consummated at the point of delivery of that jet fuel to an aircraft at a multijurisdictional airport, the sales tax revenues collected by the board pursuant to this part with respect to those sales shall be transmitted by the board in accordance with subdivision (b). For purposes of this section, a “multijurisdictional airport” is an airport that is owned or operated by a city, county, or city and county that meets both of the following conditions:

(1) The owning or operating city, county, or city and county imposes a local sales tax pursuant to an ordinance adopted pursuant to this part.

(2) The owning or operating city, county, or city or county is different from the city, county, or city and county in which the airport is located.

(b) (1) Except as provided in paragraph (2), the sales taxes collected by the board pursuant to this part with respect to retail sales of jet fuel described in subdivision (a) shall be transmitted by the board in accordance with the following:

(A) One-half to the county or city and county in which the point of delivery to the aircraft is located, less the amount transmitted to a city pursuant to subparagraph (B), if any; and one-half to the county or city and county that owns or operates the airport or to the county in which the city that owns or operates the airport is located, less the amount transmitted to a city pursuant to subparagraph (C), if any.

(B) If the multijurisdictional airport is located in a city imposing a local sales tax pursuant to an ordinance adopted pursuant to this part, the board shall transmit to that city that amount of sales taxes collected by the board with respect to retail sales of fuel described in subdivision (a) that is based on 50 percent of the rate set by that city’s ordinance.

(C) If the multijurisdictional airport is owned or operated by a city imposing a local sales tax pursuant to an ordinance adopted pursuant to this part, the board shall transmit to that city that amount of sales taxes collected by the board with respect to retail sales of fuel described in subdivision (a) that is based on 50 percent of the rate set by that city’s ordinance.

(2) Notwithstanding paragraph (1), both of the following shall apply:

(A) In the case of retail sales of jet fuel as described in subdivision (a) that are consummated at San Francisco International Airport, one-half of the sales taxes collected by the board pursuant to this part with respect to those sales shall be transmitted by the board to the City and County of San Francisco, and one-half of the sales taxes collected by the board pursuant to this part with respect to those sales shall be transmitted by the board to the County of San Mateo.

(B) In the case of retail sales of jet fuel as described in subdivision (a) that are consummated at Ontario International Airport, the board shall transmit sales taxes collected by the board pursuant to this part with respect to those sales in accordance with both of the following:

(i) All of the sales taxes that are derived from a local sales tax rate imposed by the City of Ontario shall be transmitted to that city.

(ii) All of the sales taxes that are derived from a local sales tax rate imposed by the County of San Bernardino shall be allocated to that county.

(Amended by Stats. 2005, Ch. 391, Sec. 1. Effective January 1, 2006. Operative January 1, 2008, by Sec. 3 of Ch. 391.)

7204.1.
  

(a) For purposes of this section:

(1) “Local agency” means a city, county, city and county, or redevelopment agency.

(2) “Quarterly taxes” means the total amount of sales and use taxes transmitted by the board to a local agency for a calendar quarter.

(3) “Refund” means the amount of sales and use taxes deducted by the board from a local agency’s quarterly taxes in order to pay the local agency’s share of a sales and use tax refund due to one taxpayer.

(4) “Offset portion” means, except as provided in subdivision (d), that portion of the refund which exceeds the greater of fifty thousand dollars ($50,000) or 20 percent of the local agency’s quarterly taxes.

(b) Except as provided in subdivision (c), if the board has deducted a refund from a local agency’s quarterly taxes which includes an offset portion, then the following provisions apply:

(1) Within three months after the board has deducted an offset portion, the local agency may request the board to transmit the offset portion to the local agency.

(2) As promptly as feasible after the board receives the local agency’s request, the board shall transmit to the local agency the offset portion as part of the board’s periodic transmittal of sales and use taxes.

(3) The board shall thereafter deduct a pro rata share of the offset portion from future transmittals of sales and use taxes to the local agency over a period to be determined by the board, but not less than two calendar quarters and not more than eight calendar quarters, until the entire amount of the offset portion has been deducted.

(c) The board shall not transmit the offset portion of the refund to the local agency if that transmittal would reduce or delay either the board’s payment of the refund to the taxpayer or the board’s periodic transmittals of sales and use taxes to other local agencies.

(d) Notwithstanding any other provision, past, present, or future refunds required to be made by a local agency as a result of the California Court of Appeal decision in Aerospace Corporation v. State Board of Equalization, 218 Cal. App. 3d 1300, may, at the discretion of the local agency, be made pursuant to the following provisions:

(1) “Local agency” means a city, county, city and county, redevelopment agency, or a local agency that has imposed a transactions and use tax pursuant to or in accordance with Part 1.6 (commencing with Section 7251) and that has contracted with the board to administer the taxes imposed under this part.

(2) “Offset portion” means, for purposes of this subdivision, that portion of the refund which is required as a result of the court’s decision in Aerospace Corporation v. State Board of Equalization.

(3) All refunds associated with the Aerospace Corporation case shall be aggregated so that any local agency required to make those refunds will do so on the basis of aggregate claims rather than individual claims.

(4) The State Board of Equalization shall make the refund payments required pursuant to this court case from the Local Sales Tax Offset Fund, which is hereby created, as follows:

(A) Present and future refunds shall be made from the Local Sales Tax Offset Fund.

(B) Amounts equivalent to past refund payments that have been deducted from a local jurisdiction’s sales and use tax and transactions and use tax transmittals prior to the effective date of this act shall be paid to the affected local jurisdiction from the Local Sales Tax Offset Fund.

(5) Notwithstanding Section 13340 of the Government Code, the Local Sales Tax Offset Fund is continuously appropriated without regard to fiscal years for the payment of refunds required by this paragraph. The fund may borrow moneys utilizing any financing vehicle deemed appropriate by the Treasurer, at the pooled money investment rate, in order to pay the refunds required by this paragraph. These refund payments shall be repaid to the Local Sales Tax Offset Fund by local agencies, with interest at the pooled money investment rate, not to exceed the rate paid by the state on funds borrowed by the Local Sales Tax Offset Fund for purposes of making the required refunds. Repayment of each local agency’s share of the refund amount shall be made by local agencies through equal quarterly deductions from each local agency’s sales and use taxes and transactions and use taxes prior to the transmittal of those taxes to those local agencies over the succeeding 10 years.

(6) A local agency may fulfill its refund obligation resulting from the Aerospace Corporation case in any of the following manners:

(A) Pursuant to the offset provisions provided by this section.

(B) Pursuant to the funding or refunding of outstanding indebtedness as set forth in Section 53550 of the Government Code.

(C) In any manner deemed appropriate by the local agency in accordance with existing law.

A local agency shall notify the State Board of Equalization of the manner in which the local agency intends to fulfill its refund obligation.

(Amended by Stats. 1992, Ch. 802, Sec. 4. Effective September 22, 1992.)

7204.2.
  

(a)The State Board of Equalization shall continue to negotiate a settlement with the government of the United States relating to the amount and repayment of the sales tax refund liability of the state and local agencies pursuant to the court decision in Aerospace Corporation v. State Board of Equalization, 218 Cal. App. 3d 1300. To the maximum extent possible, the board shall include in the settlement agreement a provision that, upon adoption of the settlement agreement between the board and the government of the United States, the board, the government of the United States, and the aerospace contractors affected by the court’s decision in Aerospace Corporation v. State Board of Equalization shall cease to incur any further costs associated with the audit of claims for sales tax refunds, and the repayment of the sales tax refund by local agencies shall be made on or after July 1, 1993, through deductions in sales and use tax transmittals to cities and counties pursuant to a method to be determined as specified in subdivisions (b) and (c), respectively, or pursuant to the formula determined by the board as specified in subdivision (e).

(b) (1) The State Board of Equalization shall establish a Cities Task Force on Aerospace Refunds. The task force shall be appointed by the League of California Cities. The task force shall meet regularly for the purpose specified in paragraph (2).

(2) The task force shall be responsible for establishing a method for the distribution of the sales tax refund liability among cities in the state arising from the court decision in Aerospace Corporation v. State Board of Equalization, 218 Cal. App. 3d 1300.

(3) On or before April 1, 1993, the task force shall submit to the board its recommendation of the method for the distribution of the sales tax refund liability among cities associated with the Aerospace Corporation case.

(4) The board shall adopt the recommendation of the task force and implement the method contained in the recommendation for making the deduction from city sales and use tax transmittals effective July 1, 1993.

(5) If the task force fails to submit its recommendation to the board as specified in paragraph (3), the board shall implement the formula specified in subdivision (e) to govern the distribution of deductions of sales and use tax transmittals among cities effective July 1, 1993.

(c) (1) The State Board of Equalization shall establish a Counties Task Force on Aerospace Refunds. The task force members shall be appointed by the California State Association of Counties. The task force shall meet regularly for the purpose specified in paragraph (2).

(2) The task force shall be responsible for establishing a method for the distribution of the sales tax refund liability among counties in the state arising from the court decision in Aerospace Corporation v. State Board of Equalization, 218 Cal. App. 3d 1300.

(3) On or before April 1, 1993, the task force shall submit to the board its recommendation of the method for the allocation of the sales tax refund liability among counties associated with the Aerospace Corporation case.

(4) The board shall adopt the recommendation of the task force and implement the method contained in the recommendation for making the deduction from county sales and use tax transmittals effective July 1, 1993.

(5) If the task force fails to submit its recommendation to the board as specified in paragraph (3), the board shall implement the formula as specified in subdivision (e) to govern the distribution of deductions of sales and use tax transmittals among counties effective July 1, 1993.

(d) The deductions from the sales and use tax transmittals pursuant to the methods established pursuant to subdivisions (b) and (c) shall, in the aggregate, equal the amount of the refund required of cities and counties by the Aerospace Corporation court decision.

(e) (1) If, on or before April 1, 1993, the Cities Task Force on Aerospace Refunds or the Counties Task Force on Aerospace Refunds does not submit its recommendation to the board for distributing the deductions from the sales and use tax transmittals among cities and counties, respectively, the board shall use the formula specified in this subdivision to govern the distribution among cities and counties.

(2) With regard to transmittals to each city, county, and city and county pursuant to Section 7204, the board, on or after July 1, 1993, shall deduct from the transmittals those refunds required to be paid as a result of the decision in Aerospace Corporation v. State Board of Equalization. Refunds of local taxes attributable to the Aerospace decision shall be allocated based on the following calculations:

(A) In the case of a contractor with a single business location in this state:


A = A1(X*L)

B = B1[(X*L)]*Y1

C = C1[(X*L)]*Y2

D = D1[(X*L)]*Y3


(B) In the case of a contractor with multiple business locations in this state:


A = A1(X*M)*L

B = B1[(X*M)*L]*Y1

C = C1[(X*M)*L]*Y2

D = D1[(X*M)*L]*Y3


(3) The formula or formulas specified in this section shall be used if the contractor’s business practice was such that it purchased substantially all of the property, for which it is entitled to be reimbursed as an item of indirect cost on a tax-paid basis. It shall not apply if the contractor’s business practice was such that it purchases that property without payment of tax and reported use tax on a self-accrual basis, in which case the entity where the self-accrued use tax was reported would be allocated the deduction from its sales and use tax transmittals equal to the refund required by this decision.

(4) The following definitions govern the symbols used in this subdivision:

A = Amount of local tax allocated to the jurisdiction of the contractor’s actual business location.

B = Amount of local tax allocated to the city, county, or city and county within the same county of the contractor’s business location.

C = Amount of local tax allocated to the city, county, or city and county adjoining the county of the contractor’s actual business location (adjoining counties share a common border with the county of the contractor’s actual business location).

D = Amount of local tax allocated to the city, county, or city and county in all other counties, excluding amounts allocated to A, B, and C above.

A1 = Percentage of tax overpaid by contractor at business location established pursuant to an analysis of completed Aerospace claims for refund.

B1 = Percentage of tax overpaid by contractor in the county of the business location, excluding A above, established pursuant to an analysis of completed Aerospace claims for refund.

C1 = Percentage of tax overpaid by contractor in adjoining counties of the business location established pursuant to an analysis of completed Aerospace claims for refund.

D1 = Percentage of tax overpaid by contractor in all other counties, excluding B1 and C1 above, established pursuant to an analysis of completed Aerospace claims for refund.

X = Pro rata share of tax plus interest overpaid by contractors based on the agreed-to total refund to the government of the United States. Contractor’s pro rata share shall be computed as follows:

X = The quotient of the contractor’s computed refund divided by the total computed refund (actual and estimated), multiplied by the settlement amount.

L = Local tax rate factor established pursuant to an analysis of tax rates in effect during the period of the contractor’s claim for refund.

Y1 = Percentage of local tax allocated to the city, county, or city and county within the county of the contractor’s business location, excluding A above, during the period of the claim for refund established pursuant to an analysis of the board’s annual reports.

Y2 = Percentage of local tax allocated to the city, county, or city and county in adjoining counties of the contractor’s business location during the period of the claim for refund as established pursuant to an analysis of the board’s annual reports.

Y3 = Percentage of local tax allocated to city, county, or city and county in all other counties, excluding Y1 and Y2 above, of the contractor’s business location during the period of the claim for refund as established pursuant to an analysis of the board’s annual reports.

M = Percentage of tax to be allocated to each location of a contractor with multiple locations within the state as determined by an analysis of reported taxable sales during the period of the claim for refund. This shall be computed as follows:

M = The quotient of taxable sales by location divided by total taxable sales.

(5) Percentages to be applied to elements A1, B1, C1, and D1 as determined by board data analysis shall be as follows:

Alameda
County

Los Angeles
County

Orange
County

A1

36.91%

33.87%

22.14%

B1

33.49%

54.95%

23.15%

C1

25.63%

8.02%

38.62%

D1

 3.97%

 3.16%

16.09%

San Diego
County

Santa
Barbara
County

Santa Clara
County

(All Other
Counties)

A1

48.26%

20.43%

28.31%

30.04%

B1

16.15%

25.97%

35.33%

45.22%

C1

 5.91%

15.44%

33.43%

13.50%

D1

29.68%

38.16%

 2.93%

11.24%

(6) With regard to transmittals to districts pursuant to Section 7271, the board shall deduct from the transmittals those refunds attributable to the court decision in Aerospace Corporation v. State Board of Equalization based on the formula in paragraph (7).

(7) Refunds of transaction taxes attributable to the Aerospace decision shall be allocated based on the following calculation: T = T * X.

The following definitions govern the symbols used in this paragraph:

T = Transit tax rate factor established pursuant to an analysis of the transit tax rates in effect at contractor’s location or locations during the claim for refund period.

X = Pro rata share of tax plus interest overpaid by contractor based on the agreed-to total refund to the government of the United States. Contractor’s pro rata share shall be computed as follows:

X = The quotient of contractor’s computed overpayment divided by the total overpayment (actual and estimated), multiplied by the settlement amount.

(Added by Stats. 1992, Ch. 802, Sec. 5. Effective September 22, 1992.)

7204.3.
  

The board shall charge a city, city and county, redevelopment agency, or county an amount for the board’s services in administering the sales and use tax ordinance of the local entity, as determined by the board with the concurrence of the Department of Finance, as follows:

(a) Beginning with the 2006–07 fiscal year, the amount charged each local entity shall be based on the methodology described in Alternative 4C of the November 2004 report by the State Board of Equalization entitled “Response to the Supplemental Report of the 2004 Budget Act.”

(1) The amount charged may be adjusted in the current fiscal year to reflect the difference between the board’s budgeted costs and any significant revised estimate of costs. Any adjustment shall be subject to budgetary controls included in the Budget Act. Prior to any adjustment, the Department of Finance shall notify the Chairperson of the Joint Legislative Budget Committee not later than 30 days prior to the effective date of the adjustment.

(2) The amount charged each local entity shall be adjusted to reflect the difference between the board’s recovered costs and the actual costs incurred by the board during the fiscal year two years prior.

(b) The amounts determined by subdivision (a) shall be deducted in equal amounts from the quarterly allocation of taxes collected by the board for the city, city and county, redevelopment agency, or county.

(c) Notwithstanding any other provision of this section, for the 2008–09 fiscal year to the 2014–15 fiscal year, inclusive, the amounts determined by subdivision (a) shall not include any revenues collected pursuant to Sections 6051.7 and 6201.7.

(Amended by Stats. 2009, 4th Ex. Sess., Ch. 12, Sec. 30. Effective July 28, 2009.)

7204.4.
  

The Director of Transportation and the Controller shall charge for the cost of their services in administering the responsibilities assigned to them in Chapter 4 (commencing with Section 99200) of Part 11 of Division 10 of the Public Utilities Code. Amounts to be charged shall be specified in the Budget Act. Those amounts shall be deducted from the taxes collected by the board for the counties and the cities and counties.

(Amended by Stats. 1984, Ch. 579, Sec. 33.)

7205.
  

(a) For the purpose of a sales tax imposed by an ordinance adopted pursuant to this part, all retail sales are consummated at the place of business of the retailer unless the tangible personal property sold is delivered by the retailer or his or her agent to an out-of-state destination or to a common carrier for delivery to an out-of-state destination. The gross receipts from those sales shall include delivery charges, when those charges are subject to the state sales and use tax, regardless of the place to which delivery is made.

(b) (1) In the event a retailer has no permanent place of business in the state or has more than one place of business, the place or places at which the retail sales are consummated for the purpose of a sales tax imposed by an ordinance adopted pursuant to this part shall, subject to paragraph (2), be determined under rules and regulations to be prescribed and adopted by the board.

(2) In the case of a sale of jet fuel, the place at which the retail sale of that jet fuel is consummated for the purpose of a sales tax imposed by an ordinance adopted pursuant to this part is the point of the delivery of that jet fuel to the aircraft.

(Amended by Stats. 2005, Ch. 391, Sec. 2. Effective January 1, 2006. Operative January 1, 2008, by Sec. 3 of Ch. 391.)

7205.1.
  

(a) Notwithstanding any other provision of law, in connection with any use tax imposed pursuant to this part with respect to the lease (as described in Sections 371 and 372 of the Vehicle Code) of a new or used motor vehicle as defined in subdivision (d), by a dealer or leasing company, the place of use for the reporting and transmittal of the use tax shall be determined as follows:

(1) If the lessor is a California new motor vehicle dealer (as defined in Section 426 of the Vehicle Code), or a leasing company, the place of use of the leased vehicle shall be deemed to be the city in which the lessor’s place of business (as defined in Section 7205 and the regulations promulgated thereunder) is located.

(2) If a lessor, who is not a person described in paragraph (1), purchases the vehicle from a person as so described, the place of use of the leased vehicle shall be deemed to be the city in which the place of business (as defined in Section 7205 and the regulations promulgated thereunder) of the person from whom the lessor purchases the vehicle is located.

(3) The place of use as determined by this subdivision shall be the place of use for the duration of the lease contract, notwithstanding the fact that the lessor may sell the vehicle and assign the lease contract to a third party.

(b) Except as described in subdivision (a), this section shall not apply if the dealer or leasing company entering into the lease agreement is located outside of California.

(c) (1) The provisions of this section that are applicable to a California new motor vehicle dealer shall apply to lease transactions entered into on or after January 1, 1996.

(2) The provisions of this section, applicable to a leasing company, shall apply to lease transactions entered into on or after January 1, 1999.

(d) As used in this section, the following definitions shall apply:

(1) “City” means a city, city and county, or county.

(2) “Motor vehicle” means any self-propelled passenger vehicle (other than a house car) or pickup truck rated less than one ton.

(3) “Leasing company” means a motor vehicle dealer (as defined in Section 285 of the Vehicle Code), that complies with all of the following:

(A) The dealer originates lease contracts, described in subdivision (a), that are continuing sales and purchases.

(B) The dealer does not sell or assign those lease contracts that it originates in accordance with subparagraph (A).

(C) (i) The dealer has annual motor vehicle lease receipts of fifteen million dollars ($15,000,000) or more per location.

(ii) For purposes of this subparagraph, only those periodic payments required by the lease shall be considered in determining whether a lessor has annual receipts of fifteen million dollars ($15,000,000) or more. Amounts received by lessors attributable to capitalized cost reductions or amounts paid by a lessee upon his or her exercising an option shall not be considered in determining whether a lessor has annual lease receipts of fifteen million dollars ($15,000,000) or more.

(e) If the lessor is not a dealer described in paragraph (1) of subdivision (a), or a person who is described in paragraph (2) of subdivision (a) as purchasing from a dealer, the use tax shall be reported to and distributed through the countywide pool of the county in which the lessee resides.

(Amended by Stats. 2002, Ch. 775, Sec. 42. Effective January 1, 2003.)

7207.
  

Nothing in this part shall require or be construed to require any city, county, or city and county, to impose any sales or use taxes or to increase any sales or use taxes.

(Added by Stats. 1955, Ch. 1311.)

7209.
  

The board may redistribute tax, penalty and interest distributed to a county or city other than the county or city entitled thereto but such redistribution shall not be made as to amounts originally distributed earlier than two quarterly periods prior to the quarterly period in which the board obtains knowledge of the improper distribution.

(Added by Stats. 1959, Ch. 1785.)

7210.
  

Notwithstanding Section 7203.5, the State Board of Equalization shall continue to administer the sales and use tax ordinance of any city, county, or city and county which adopts an ordinance imposing a tax on the sale, storage, use, or consumption of motor vehicle fuel pursuant to Chapter 5 (commencing with Section 99500), Part 11, Division 10 of the Public Utilities Code or Part 4 (commencing with Section 9501) of this division.

(Amended by Stats. 1981, Ch. 541, Sec. 7. Effective September 17, 1981.)

7211.
  

Notwithstanding Section 7203.5, the State Board of Equalization shall continue to administer the sales and use tax ordinance of any city, county, or city and county that adopts a transactions and use tax ordinance administered by the board in accordance with Part 1.6 (commencing with Section 7251).

(Amended by Stats. 2007, Ch. 342, Sec. 7. Effective January 1, 2008.)

7212.
  

Any redevelopment agency adopting a sales and use tax ordinance pursuant to Section 7202.6 shall pay to the board its costs of preparation to administer and operate the sales and use tax ordinance. The agency shall pay such costs monthly as incurred and billed by the board. The costs include all preparatory costs, including costs of developing procedures, programming for data processing, developing and adopting appropriate regulations, designing and printing of forms, developing instructions for the board’s staff and for taxpayers, and other necessary preparatory costs which shall include the board’s direct and indirect costs as specified by Section 11256 of the Government Code. Any disputes as to the amount of preparatory costs incurred shall be resolved by the Director of Finance, and his decision shall be final. The maximum amount of all preparatory costs to be paid by the district shall not, in any event, exceed five hundred seventy thousand dollars ($570,000). If for any reason the ordinance adopted pursuant to Section 7202.6 is declared to be invalid, the board shall not be required to refund any or all revenues collected pursuant to that ordinance, but rather those revenues shall be distributed to the city within which the redevelopment agency operates.

(Added by Stats. 1981, Ch. 951, Sec. 8.)

RTCRevenue and Taxation Code - RTC