SB 1275

Introduced by Senator McNerney
(Coauthor: Senator Grayson)
 An act to add and repeal Sections 6368.4 and 10752.3 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.
taxation, to take effect immediately, tax levy
Sales and use tax exemption: vehicle license fee imposition: motor vehicles.
(1) Existing state 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 would, on and after July 1, 2027, and before
			 July 1, 2032, exempt from those taxes the gross receipts from the sale of, and the storage, use, or other consumption of a used motor vehicle sold by specified dealers or their affiliates or a new motor vehicle.
Existing law requires a bill authorizing a new tax expenditure to contain, among other things, specific goals the tax expenditure will achieve, detailed performance indicators, and data collection requirements.
This bill would exclude the exemption from that requirement.
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.
This bill would provide that the exemption created by this bill does not apply to local sales and use taxes or transactions and use taxes.
Existing law imposes or dedicates certain state sales and use tax rates for local funding, including through the Local Revenue Fund 2011.
This bill would provide that the exemption created by this bill does not apply to those state sales and use tax rates imposed or dedicated for local government funding, including those rates for which revenues are deposited into the Local Revenue Fund 2011.
(2) The Vehicle License Fee Law imposes a license fee for the privilege of operating upon the public highways in this state of specified vehicles, including any vehicle of a type which is subject to registration under the Vehicle Code.
This bill would impose, on and after July 1, 2027, and before July 1, 2032, upon the
			 sale of a used motor vehicle sold by specified dealers or their affiliates or the first sale of a new motor vehicle to a consumer, an additional license fee equal to 3.9375% of the gross receipts from the sale. The bill would require the dealer to collect the license fee, as described, and remit the funds. The bill would require the Department of Motor Vehicles to report the amounts collected to the California Department of Tax and Fee Administration and deposit those moneys in the General Fund.
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
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 of the membership of each house of the Legislature.
(3) This bill would take effect immediately as a tax levy.
The people of the State of California do enact as follows:
SECTION 1.
Section 6368.4 is added to the
Revenue and Taxation Code
, to read:
6368.4.
(a) On and after July 1, 2027, and before July 1, 2032, 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, a used motor vehicle sold by a dealer or its affiliate that is exempt under subdivision (h) of
						Section 6295 or a new motor vehicle.
(b) (1) Notwithstanding the Bradley-Burns Uniform Local Sales and Use Tax Law (Part 1.5 (commencing with Section 7200)) and the Transactions and Use Tax Law (Part 1.6 (commencing with Section 7251)), the exemption established by this section shall not apply with respect to any tax levied by a city, county, or district pursuant to, or in accordance with, either of those laws.
(2) Notwithstanding subdivision (a), the exemption established by this section shall not apply with respect to any tax levied pursuant to Section 6051.2 or 6201.2, pursuant to Section 35 of Article XIII of the California Constitution, or any tax levied pursuant to Section 6051 or 6201 that is deposited in the State Treasury to the
						credit of the Local Revenue Fund 2011 pursuant to Section 6051.15 or 6201.15.
(c) Section 41 shall not apply to this exemption.
(d) This section shall remain in effect only until January 1, 2033, and as of that date is repealed.
SEC. 2.
Section 10752.3 is added to the
Revenue and Taxation Code
, to read:
10752.3.
(a) On and after July 1, 2027, and before July 1, 2032, upon the sale of a used motor vehicle sold by a dealer or its affiliate that is exempt under subdivision (h) of Section 6295 or the first sale of a new motor vehicle to a consumer, in addition to the license fees imposed by this part, there
						shall be an additional license fee equal to 3.9375 percent of the gross receipts from the sale.
(b) The dealer shall collect the license fee imposed by subdivision (a) as a separate line item, and remit the funds in the same manner as fees imposed pursuant to this article.
(c) The Department of Motor Vehicles shall report amounts collected pursuant to this section to the California Department of Tax and Fee Administration and deposited in the General Fund pursuant to subdivision (d) on or before
						the last month following the close of a calendar quarter.
(d) Notwithstanding Chapter 5 (commencing with Section 11001) or any other law to the contrary, all revenues, including penalties, less refunds, derived from fees collected pursuant to subdivision (a) shall be deposited in the General Fund.
(e) This section shall not be construed to alter the rates of other license fees imposed under this chapter, including, but not limited to, Section 10752.
(f) This section shall remain in effect only until January 1,
						2033, and as of that date is repealed.
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.