Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2013
 

Uniform Local Sales And Use Tax Law

CHAPTER 1 GENERAL PROVISIONS

Section 7203.5

7203.5. Termination of state administration. 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.

History.—Added by Stats. 1968, p. 2387, in effect August 13, 1968. Stats. 1971, p. 2788, operative July 1, 1972, completely revised section. Stats. 1981, Ch. 951, in effect January 1, 1982, added "redevelopment agency" before "or city and county" throughout this section. Superseded on operative date of amendment by Stats. 1996, Ch. 940 (AB 3407).

Note.—Section 11 of Stats. 1981, Ch. 951, provided, notwithstanding "any other provision of this act, the State Board of Equalization shall not administer any sales tax imposed by a redevelopment agency pursuant to this act unless and until an appellate court makes a determination which is final on the merits that such a tax is not a "special tax" within the meaning of Section 4 of Article XIII A of the California Constitution."

Note.—Sec. 2 of Stats. 1968, Ch. 1265, in effect August 13, 1968, makes a number of legislative findings as to the importance to the state of the sales and use tax and the need for a uniform tax, and declares that the Legislature, by enactment of the Sales and Use Tax Law and the Bradley-Burns Uniform Local Sales and Use Tax Law, has preempted this area of taxation. Stats. 1971, Ch. 1354, in effect March 4, 1972, also amended section 7203.5 in the same manner as Stats. 1971, Ch. 1400, except that it included the language "except as herein provided" at the beginning of the section, and was operative on March 4, 1972.

Prohibited city tax.—By Section 32010 and this section the state has preempted the field of taxation of alcoholic beverages. Accordingly, a special city excise tax on the purchase of alcoholic beverages for consumption on the premises where sold is invalid. Century Plaza Hotel Co. v. City of Los Angeles (1970) 7 Cal.App.3d 616.

Authorized city tax.—The Fresno 5 percent municipal utility users’ tax imposed on the charges incurred on telephone services, electrical energy, and gas delivered through mains, pipes, and lines is valid and is expressly excepted from the limitations in section 7203.5. Rivera v. City of Fresno (1971) 6 Cal.3d 132.

7203.5. Termination of state administration. (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.

History.—Added by Stats. 1968, p. 2387, in effect August 13, 1968. Stats. 1971, p. 2788, operative July 1, 1972, , completely revised section. Stats. 1981, Ch. 951, in effect January 1, 1982, added "redevelopment agency" before "or city and county" throughout this section. Stats. 1996, Ch. 940, in effect January 1, 1997, conditionally operative as prescribed by Sec. 4 of Ch. 940, added subdivision letter designation (a) before first paragraph; deleted "redevelopment agency" after "county," throughout text; added subdivisions (b), (c), and (d); added subdivision letter designation (e) before the former second paragraph, added "in the case of a termination the" after "(e)", substituted "That" for "Such" before "contract" in the third sentence and substituted "that" for "such" after "ordinance of" in the fourth sentence therein; added subdivision letter designation (f) before the former third paragraph, substituted "Except as . . . nothing" for "Nothing", and substituted "California Constitution" for "Constitution of California" therein.

Note.—Section 4 of Stats 1996, Ch. 940 (AB 3407), in effect January 1, 1997, states, "The amendments made to Section 7203.5 of the Revenue and Taxation Code by Section 1 of this act shall become operative only if the provisions of Section 7282.3 of the Revenue and Taxation Code, as added by Section 2 of this act, are held to be inapplicable to charter cities.

Note.—Section 11 of Stats. 1981, Ch. 951, provided, notwithstanding "any other provision of this act, the State Board of Equalization shall not administer any sales tax imposed by a redevelopment agency pursuant to this act unless and until an appellate court makes a determination which is final on the merits that such a tax is not a "special tax" within the meaning of Section 4 of Article XIII A of the California Constitution."

Note.—Sec. 2 of Stats. 1968, Ch. 1265, in effect August 13, 1968, makes a number of legislative findings as to the importance to the state of the sales and use tax and the need for a uniform tax, and declares that the Legislature, by enactment of the Sales and Use Tax Law and the Bradley-Burns Uniform Local Sales and Use Tax Law, has preempted this area of taxation. Stats. 1971, Ch. 1354, in effect March 4, 1972, also amended section 7203.5 in the same manner as Stats. 1971, Ch. 1400, except that it included the language "except as herein provided" at the beginning of the section, and was operative on March 4, 1972.

Prohibited city tax.—By Section 32010 and this section the state has preempted the field of taxation of alcoholic beverages. Accordingly, a special city excise tax on the purchase of alcoholic beverages for consumption on the premises where sold is invalid. Century Plaza Hotel Co. v. City of Los Angeles (1970) 7 Cal.App.3d 616.

Authorized city tax.—The Fresno 5 percent municipal utility users’ tax imposed on the charges incurred on telephone services, electrical energy, and gas delivered through mains, pipes, and lines is valid and is expressly excepted from the limitations in section 7203.5. Rivera v. City of Fresno (1971) 6 Cal.3d 132.