Stay up to date with sales tax: Join our mailing list!


Representative Lamar Smith (Republican, Texas) has introduced a bill to bar multiple taxes on digital goods and services.  Smith had proposed an earlier bill which failed to pass.  This bill is a revised version of the earlier bill. The proposed bill – called the Digital Goods and Services Tax Fairness Act of 2013 – would only allow a state to tax sales of digital goods and services to customers with a tax address within that state. Additionally, states would be barred from imposing multiple taxes on digital goods. The bill defines digital goods as sounds, images, data and facts maintained in digital form. Internet access service is not included as a digital good in the bill. (H.R. 3724)

(01/28/2014)

The City of Los Angeles has enacted a tax amnesty program, effective September 1, 2013 through December 2, 2013.  The amnesty program applies to the following City of Los Angeles taxes: Business, Utility Users Taxes (Telephone, Electricity, Gas), Commercial Tenant's Occupancy, Transient Occupancy, and Parking Occupancy Taxes.  Under the program, taxpayers that submit a tax amnesty application and pay all outstanding tax, interest, and fees during the amnesty period will have all penalties waived.  Following this amnesty period, the Office of Finance will pursue a range of enforcement actions including an additional 10% negligence penalty, an expanded audit program and expanded on-site investigations, and other enforcement actions.  For more details on the amnesty program, visit our Sales Tax Amnesty chart which has a link to the Office of Finance’s amnesty page.  (Tax Amnesty Program, City of Los Angeles Office of Finance, September 2013)

(09/13/2013)

California Gov. Jerry Brown has enacted a state sales and use tax exemption for purchases of manufacturing and research and development (R&D) equipment by biotechnology and manufacturing companies. Effective July 1, 2014 through July 1, 2022, the sale, storage, use, or other consumption in California of qualified tangible personal property (TPP) purchased for use by a qualified person to be used primarily (50% or more of the time) in any stage of the manufacturing, processing, refining, fabricating, or recycling of TPP is exempt from tax.  The exemption applies for the purchase of machinery and equipment used throughout the manufacturing process beginning at the point any raw materials are received by the qualified person and introduced into the process and ending at the point at which the manufacturing, processing, refining, fabricating, or recycling has altered TPP to its completed form, including packaging, if required.  Machinery and equipment used by a qualified person primarily in R&D as well as equipment used primarily to maintain, repair, measure, or test any qualified TPP described above is also exempt.  Purchases by a contractor for use in the performance of a construction contract for the qualified person that will use the property as an integral part of the manufacturing, processing, refining, fabricating, or recycling process, or as a research or storage facility for use in connection with those processes is also exempt.  For the exemption to apply, the purchaser must provide the retailer with an exemption certificate. Retailers must retain the exemption certificate in their records and furnish it to the California State Board of Equalization upon request. Excluded from the exemption are consumable supplies and repair and replacement parts with a useful life of less than one year.

 

The exemption does not apply to any TPP purchased during any calendar year that exceeds $200 million of purchases of qualified TPP for which this exemption is claimed by a qualified person; or the sale or storage, use, or other consumption of property that, within one year from the date of purchase, is removed from California, converted from an exempt use, as provided, to some other use not qualifying for exemption, or used in a manner not qualifying for exemption.  If a purchaser certifies in writing to the seller that the TPP purchased without payment of the tax will be used in a manner entitling the seller to regard the gross receipts from the sale as exempt from the sales tax, and the purchase exceeds the $200 million limitation, or is removed from California within one year, converted for non-qualifying use or used in a non-qualifying manner as described above, the purchaser will be liable for payment of sales tax with applicable interest, as if the purchaser were a retailer making a retail sale of the property at the time the property is so purchased, removed, converted, or used, and the cost of the property to the purchaser will be deemed the gross receipts from that retail sale. The exemption does not apply to local sales and use taxes imposed under the Bradley-Burns Uniform Local Sales and Use Tax Law, transactions and use taxes imposed under the Transactions and Use Tax Law, and certain state taxes, as specified, from which revenues are deposited into certain funds including the Local Public Safety Fund, the Local Revenue Fund, and the Local Revenue Fund 2011.  The exemption is repealed effective January 1, 2023.  (S.B. 90 and A.B. 93, Laws 2013, both effective July 11, 2013)

 

Click here for an update on this news item. 

(10/23/2013)

California has enacted legislation that imposes a sales tax at the rate of 3.9375%, effective July 1, 2013 through June 30, 2016, on the retail sale of Medi-Cal health care services sold at retail in the state. Counties, cities, and districts may not impose or add any additional sales or use tax on the gross receipts. This tax is in addition to the Insurance Gross Premiums Tax.  Sellers who sell such health care plans must register for a seller’s permit, report gross receipts, and remit the sales tax. Sellers are instructed to complete an application by September 10, 2013. Any person or entity who enters into a contract with the State Department of Health Care Services (DHCS) to provide health care services, other than an insurer as defined by Revenue and Taxation Code §12003 or a dental managed care plan, is regarded as a seller and must register with the BOE. Online registration is not available. The amount subject to tax is the total amount received by a seller of Medi-Cal managed care plans in premium or capitation payments for the coverage or provision of all health care services, including but not limited to Medi-Cal services. The taxable amount excludes amounts received pursuant to a subcontract with a Medi-Cal managed care plan to provide health care services to Medi-Cal beneficiaries.  Sellers must file returns quarterly by October 31, January 31, April 30, and July 31. Tax return forms and prepayment forms will be provided by the BOE as appropriate. If a seller’s taxable gross receipts average $17,000 or more per month, two prepayments must be made within each quarter (except for the quarterly period July 1, 2013, through September 30, 2013). When a seller registers with the BOE, the BOE will notify the seller of the seller’s filing basis and whether it is necessary to file prepayments.  Click here for an update on this news item. (CA SB 78;Special Notice L-359, California State Board of Equalization, August 2013)

(08/26/2013)

California has amended a sales and use tax regulation regarding U.S. government supply contracts. The amended regulation provides that the term "retail sale" means a sale for any purpose other than resale in the regular course of business and provides an exemption from sales tax for gross receipts from the sale of tangible personal property to the United States. The amendments make the regulation consistent with 2007 amendments to the Federal Acquisition Regulation codified in the Code of Federal Regulations.  The amendments also clarify the requirements for making sales for resale of direct and indirect consumable supplies, including overhead materials to the United States government. (Reg. 1618, California State Board of Equalization, effective September 6, 2012)

(06/12/2013)

Pages

Scroll to Top