Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2014
 

Uniform Local Sales And Use Tax Law

CHAPTER 1 GENERAL PROVISIONS

CHAPTER 1 GENERAL PROVISIONS

7200. Title. This part is known and may be cited as the "Bradley-Burns Uniform Local Sales and Use Tax Law."

7200.1. "Redevelopment agency." [Repealed by Stats. 1989, Ch. 24, effective May 25, 1989.]

7200.1. "Redevelopment agency." [Repealed by Stats. 1993, Ch. 942, in effect January 1, 1994.]

7201. Counties authorized to adopt tax. Any county may by action of its board of supervisors adopt a sales and use tax in accordance with the provisions of this part.

Referendum.—A county ordinance imposing the tax authorized by this part is not subject to referendum. Geiger v. Board of Supervisors (1957) 48 Cal.2d 832.

7202. Required provisions of county sales tax; credit for city tax. [Repealed by Stats. 1979, Ch. 5, operative January 1, 1984.]


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7202. Required provisions of county sales tax; credit for city tax. 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 1¼; 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.

History.—Added by Stats. 1979, Ch. 5, operative January 1, 1984. Stats. 1984, Ch. 17, effective March 1, 1984, section ceases to be operative on March 1, 1984, and thereafter this section shall become operative on January 1, 1986, renumbered paragraph designations, in paragraph (A) substituted "that person" for "him" after "sold by," added paragraph (b) at end of section. Stats. 1985, Ch. 838, operative January 1, 1988, substituted "1988" for "1986" in subdivision (b). Stats. 1991, Ch. 236, in effect July 29, 1991, added ", other than fuel or petroleum products," after "tangible personal property" in paragraph (7) of subdivision (a). Stats. 1992, Ch. 905, in effect September 25, 1992, operative January 1, 1993, deleted subdivision letter "(a)" in the first paragraph; lettered former paragraphs (1), (2), (3), (4), (5), (6), (7), and (8) as subdivisions (a), (b), (c), (d), (e), (f), (g), and (h), respectively; numbered former subparagraphs (A), (B), (C), (D), (E), (F), ( G), and (H) as paragraphs (1), (2), (3), (4), (5), (6), (7), and (8), respectively; deleted "of this division" after "(commencing with Section 6001)" in subdivisions (b) and (c) and paragraphs (2) and (3) of subdivision (h); deleted "of this code" after "Section 6067" in subdivision (c) and paragraph (2) of subdivision (h) and after "6366.1" in paragraph (8) of subdivision (h); substituted "the" for "such" after "exclusively in the use of" in paragraphs (7) and (8), and after "consumed by" in paragraph (8), of subdivision (h); and deleted former subdivision (b) which stated that "This section shall cease to be operative on March 1, 1984, and thereafter this section shall become operative on January 1, 1988.". Stats. 2003, Ch. 13X (AB 7X), in effect August 2, 2003, but operative July 1, 2004, added ", and on and . . . 67 percent" after "80 percent" in subdivision (g) and deleted a comma after "provided" in subdivision (h). Stats. 2003, Ch. 2 (AB X5 9), in effect December 12, 2003, but operative July 1, 2004, substituted "75" for "67" after "Section 7203.1 cease to apply, exempt from" in subdivision (c).

Sale of lottery ticket forms.—Bradley-Burns Law, which required city to contract with the Board to administer its local sales and use tax ordinance, implicitly granted the city standing to challenge the Board's actions under the contract, including the Board's decision that sales of lottery ticket forms, manufactured by seller at a plant located in the city, to the California Lottery Commission were not subject to state or local tax. City of Gilroy v. State Board of Equalization (1989) 212 Cal.App.3d 589.


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7202.5. City tax; credit for sales and use tax due to a redevelopment agency. [Repealed by Stats. 1985, Ch. 838, operative January 1, 1986.]

7202.5. City tax; credit for sales and use tax due to a redevelopment agency. 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.

History.—Added by Stats. 1981, Ch. 951, in effect January 1, 1982, operative January 1, 1984. Stats. 1984, Ch. 17, effective March 1, 1984, section ceases to be operative on March 1, 1984, and thereafter this section becomes operative on January 1, 1986, added subdivision designations, substituted "subparagraphs . . . of subdivision (a)" for "paragraphs . . . of subdivision (h)" in paragraph (a). Stats. 1985, Ch. 838, operative January 1, 1988, substituted "1988" for "1986" in subdivision (b). Stats. 1989, Ch. 24, in effect May 25, 1989, deleted "(a)" before first paragraph and deleted subdivision (b). Stats. 1990, Ch. 1608, in effect January 1, 1991, added ", county, or city and county" after "city", added ", county's, or city and county's" after "city's" and deleted "of such city" after "agency". Stats. 1992, Ch. 905, in effect September 25, 1992, operative January 1, 1993, substituted "paragraphs (1) to (8), inclusive, of subdivision (h)" for "subparagraphs (A) to (H), inclusive, of paragraph (8) of subdivision (a)" after "provisions set forth in".

Note.—Section 9 of Stats. 1981, Ch. 951, provided this section shall be repealed on January 1, 1984.

Note.—Section 10 of Stats. 1981, Ch. 951, provided the "Legislature intends that the provisions of this act shall not supersede or conflict with the excess sales tax transfer provisions of Chapter 282 of the Statutes of 1979."

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."

Redevelopment agency not special district.—A redevelopment agency is not a special district, and this provision is constitutional. Huntington Park Redevelopment Agency v. Martin (1985) 38 Cal.3d 100.

7202.6. Sales and use tax ordinance; adoption by a redevelopment agency. [Repealed by Stats. 1993, Ch. 942, in effect January 1, 1994.]

Note.—Section 38 of Stats. 1993, Ch. 942, provided the Legislature intent that the repeal of Section 7202.6 shall not be deemed or construed to invalidate, impair, or otherwise affect the following:

(1) An ordinance adopted by a redevelopment agency, prior to January 1, 1994, pursuant to either of the above code sections.

(2) The receipt of revenues by a redevelopment agency, after January 1, 1994, under an ordinance adopted prior to that date, pursuant to either of the above code sections.

(3) The pledge of revenues described in paragraph (2) by a redevelopment agency, pursuant to an agreement entered into prior to January 1, 1994.


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7202.8. Redevelopment agency bonds; protection from impairment. 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.

History.—Added by Stats. 1981, Ch. 951, in effect January 1, 1982.

7203. Required provisions of county use tax. 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 1¼; 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.

History.—Added by Stats. 1984, Ch. 17, effective March 1, 1984, repeal operative January 1, 1986. Stats. 1985, Ch. 838, operative January 1, 1986 until January 1, 1988, and as of that date is repealed, unless a later enacted statute, chaptered before December 31, 1987, deletes or extends such date, substituted "1988" for "1986" in both places in subdivision (b). Stats. 1991, Ch. 236, in effect July 29, 1991, deleted former paragraph (5) of subdivision (a) which provided, "(5) A provision that the storage, use, or other consumption of tangible personal property purchased by operators of waterborne vessels and used or consumed by such operators directly and exclusively in the carriage of persons or property in such vessels for commercial purposes is exempted from 80 percent of the use tax."; renumbered former paragraph (6) as paragraph (5) and added ", other than fuel or petroleum products," after "tangible personal property" in paragraph (5) of subdivision (a). Stats. 1992, Ch. 905, in effect September 25, 1992, operative January 1, 1993, deleted subdivision letter "(a)" in the first paragraph; substituted "That" for "Such" before "tax shall be" in the second sentence of the first paragraph; lettered former paragraphs (1), (2), (3), (4), and (5) as subdivisions (a), (b), (c), (d), and (e), respectively; substituted "those" for "such" after "Section 6201 insofar as" in subdivision (a); substituted "the" for "such" after "used or consumed by" and after "exclusively in the use of", and deleted a comma after "United States" in subdivision (e); and deleted former subdivision (b) which stated that "This section shall remain in effect only until January 1, 1988, and as of that date is repealed, unless a later enacted statute, which is chaptered before January 1, 1988, deletes or extends that date.". Stats. 2003, Ch. 13X (AB 7X), in effect August 2, 2003, but operative July 1, 2004, added a comma after "use tax" in subdivision (a), and added "percent of the...from 67" in subdivision (e). Stats. 2003, Ch. 2 (AB X5 9), in effect December 12, 2003, but operative July 1, 2004, substituted "75" for "67" after "Section 7203.1 cease to apply, exempt from" in subdivision (e).


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7203.1. Revenue exchange period; rate of tax. (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.

History.—Added by Stats. 2003, Ch. 13X (AB 7X), in effect August 2, 2003, but operative July 1, 2004. Stats. 2003, Ch. 2 (AB X5 9), in effect December 12, 2003, but operative July 1, 2004, substituted "1 percent" for "three-quarters of 1 percent" in paragraph (1) in subdivision (a), substituted "three-quarters" for "one-half" in paragraph (2) in subdivision (a), and added subdivision (d). "Section 7203.1 cease to apply, exempt from" in subdivision (c). Stats. 2004, Ch. 211 (SB 1096), in effect August 5, 2004, substituted "the rate specified . . . one-quarter" for "the applicable of the following: (1) In the case of a county, 1 percent. (2) In the case of a city, three-quarters" after "so adopted is" in subdivision (a). Stats. 2004, Ch. 610 (AB 2115), in effect September 20, 2004, substituted "applicable of . . . or less" for "rate specified in . . . 1 percent" after "so adopted is the" in subdivision (a).

7203.2. Adoption of specified provisions by reference. 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 Section 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.

History.—Added by Stats. 1985, Ch. 591, effective January 1, 1986.


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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.


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7204. Transmittal of taxes to cities and counties; charges. 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.

History.—Stats. 1959, p. 3781, in effect September 18, 1959, substituting "periodically as promptly as feasible" for "monthly" and added second sentence. Stats. 1971, p. 2789, operative July 1, 1972, deleted the language providing for board charges to the city, city and county or county for board's services. Stats. 1981, Ch. 951, in effect January 1, 1982, added "redevelopment agency" before each "or county" in the first sentence.

Effective date of contract.—Where a city contracted with the Board of Equalization for its administration of a sales and use tax imposed by city ordinance, the effective date of contract was controlled by Government Code § 13370, providing that contracts with state agencies shall be effective from the date of approval by the Department of Finance, notwithstanding that the ordinance purported to be effective as of an earlier date. City of Commerce v. State Board of Equalization (1962) 205 Cal.App.2d 387.

7204.01. Transmittals: jurisdictions affected by earthquake. (a) With regard to transmittals pursuant to Section 7204 to each city, county, and city and county within the disaster area designated by the President of the United States as a result of the earthquake of October 17, 1989, the State Board of Equalization shall calculate the difference between the transmittals to each city, county, and city and county for the fourth calendar quarter of 1989 and the first calendar quarter of 1990 and the corresponding transmittals for the fourth calendar quarter of 1988 and the first calendar quarter of 1989. The State Board of Equalization shall, on or before January 1, 1991, notify each city, county, and city and county of the amounts of the differences and certify the amounts to the Controller.

(b) Within 10 days after the first notification pursuant to subdivision (a), the legislative body of a city, county, or city and county which received amounts which are less than the amounts received for the last calendar quarter of 1988 and the first calendar quarter of 1989, may request the Controller to transmit, from the Earthquake Disaster Revenue Stabilization Assistance Fund established pursuant to Section 7204.03, the amounts of the differences, provided the total amount requested is no less than ten thousand dollars ($10,000). Requests submitted pursuant to this subdivision shall be submitted on or before December 1, 1991, and shall include findings adopted by the legislative body that the amount of the difference is directly attributable to the earthquake of October 17, 1989.

(c) Within 10 days of receiving a request pursuant to subdivision (b), the Controller shall transmit the requested amount.

(d) Notwithstanding any other provision of this section, if the Controller determines that the amount of sales tax revenue received by the State of California in the fourth calendar quarter of 1989 and the first calendar quarter of 1990 is less than the amount received in the corresponding quarters of the immediately preceding calendar year, the Controller shall reduce the amounts transmitted pursuant to subdivision (c) in proportion to that reduction.

(e) This section shall remain in effect only until January 1, 1992, and as of that date is repealed.

History.—Added by Stats. 1990, Ch. 37, (IX), in effect September 25, 1990.


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7204.02. Reductions in transmittals. [Repealed by Stats. 2007, Ch. 342 (AB 1748), in effect January 1, 2008.]

7204.03. Earthquake Disaster Revenue Stabilization Assistance Fund. [Repealed by Stats. 1990, Ch. 37, in effect January 1, 1992.]

7204.03. Place of sale: sales of jet fuel. (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.

History.—Added by Stats. 1998, Ch. 1027, in effect September 30, 1998, but operative January 1, 1999. Stats. 2005, Ch. 391 (AB 451), in effect January 1, 2006, but operative January 1, 2008, deleted ", in accordance with paragraph (2) of subdivision (b) of Section 7205," after "fuel that are" in subdivision (a).


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7204.1. Local agency; offset portion. (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.

History.—Added by Stats. 1989, Ch. 274, in effect January 1, 1990. Stats. 1992, Ch. 802, added subdivision (d).


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7204.2. Aerospace refunds. (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 = A 1 (X*L)

B = B 1 [(X*L)]*Y 1

C = C 1 [(X*L)]*Y 2

D = D 1 [(X*L)]*Y 3

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

A = A 1 (X*M)*L

B = B 1 [(X*M)*L]*Y 1

C = C 1 [(X*M)*L]*Y 2

D = D 1 [(X*M)*L]*Y 3

(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.

A 1 = Percentage of tax overpaid by contractor at business location established pursuant to an analysis of completed Aerospace claims for refund.

B 1 = 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.

C 1 = Percentage of tax overpaid by contractor in adjoining counties of the business location established pursuant to an analysis of completed Aerospace claims for refund.

D 1 = Percentage of tax overpaid by contractor in all other counties, excluding B 1 and C 1 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.

Y 1 = 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.

Y 2 = 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.

Y 3 = Percentage of local tax allocated to city, county, or city and county in all other counties, excluding Y 1 and Y 2 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 A 1 , B 1 , C 1 , and D 1 as determined by board data analysis shall be as follows:

% Elements Alameda County Los Angeles County Orange County

A 1

36.91% 33.87% 22.14%

B 1

33.49% 54.95% 23.15%

C 1

25.63% 8.02% 38.62%

D 1

3.97% 3.16% 16.09%

% Elements San Diego County Santa Barbara County Santa Clara County (All Other Counties)

A 1

48.26% 20.43% 28.31% 30.04%

B 1

16.15% 25.97% 35.33% 45.22%

C 1

5.91% 15.44% 33.43% 13.50%

D 1

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.

History.—Added by Stats. 1992, Ch. 802, in effect September 22, 1992.


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7204.3. Charge for administration by the board. 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.

History.—Added by Stats. 1971, p. 2789, operative July 1, 1972. Stats. 1981, Ch. 951, in effect January 1, 1982, added "redevelopment agency" before the first "or county" in the first sentence. Stats. 1982, Ch. 1589, in effect January 1, 1983, added "redevelopment agency" before the second "or county" in the first sentence and before "or county" in the second sentence. Stats. 1990, Ch. 1077, in effect January 1, 1991, added a comma after "redevelopment agency" throughout section; added "the following amounts:", added subdivision letter (a); added ", and before July 1, 1991", added subdivision (b); substituted "Those" for "Such". Stats. 1993, Ch. 75, in effect June 30, 1993, substituted "an amount for" for ", as the cost of" and "as determined . . . Finance, as follows" for "the following amounts" in the first paragraph; deleted the former provisions of subdivision (a) which stated "0.82 percent of all sales and use taxes available for distribution to the city, city and county, redevelopment agency, or county on and after July 1, 1972, and before July 1, 1991" and added the first paragraph and paragraphs (1), (2), and (3); deleted former subdivision (b) which stated "0.79 percent of all sales and use taxes available for distribution to the city, city and county, redevelopment agency, or county on and after July 1, 1991; and substituted "The" for "Those" and added "determined by subdivision (a)" after "amounts", "in equal amounts" after "deducted", and "quarterly allocation of" before "taxes" in the last paragraph. Stats. 2006, Ch. 49 (AB 1809), in effect June 30, 2006, deleted the comma after "agency, or county" in the first paragraph; substituted "2006 07" for "1993 94" after "Beginning with the", added "each local entity" after "the amount charged" and substituted "methodology described . . . 2004 Budget Act" for "total local entity cost reflected in the annual Budget Act. This amount comprises the categories of direct, shared, and central agency costs incurred by the board and shall include the following:" after "based on the" in subdivision (a); deleted former paragraph (1) of subdivision (a) which provided, "The amount charged to each entity shall be based on the recommendations incorporated in the March 1992 report by the Auditor General entitled "The Board of Equalization Needs To Adjust Its Model For Setting Reimbursement Rates For Special Tax Jurisdictions."; renumbered former paragraphs (2) and (3) as (1) and (2), respectively; substituted "The amount charged each district" for "For the 1995 96 fiscal year and each fiscal year thereafter, the" in former paragraph (3) of subdivision (a); and created new subdivision (b) using the former second sentence of former paragraph (3). Stats. 2007, Ch. 342 (AB 1748), in effect January 1, 2008, substituted "local entity" for "district" after "amount charged each" in paragraph (2) of subdivision (a). Stats. 2009, Ch. 12XXXX (AB 12XXXX), in effect July 28, 2009, added subdivision (c).

7204.4. Charge for administration by Director of Transportation and the Controller. 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.

History.—Added by Stats. 1972, Ch. 1408, effective December 27, 1972. Stats. 1979, Ch. 1002, effective September 26, 1979, added "and the State Controller", changed "his" to "their" and "him" to "them", deleted reference to fiscal year 1972/73 in the first sentence, deleted "in subsequent fiscal years" following "to be charged" in the second sentence, deleted "and shall be transmitted to the secretary" from the end of the last sentence. Stats. 1984, Ch. 579, substituted "The Director of Transportation" for "The Secretary . . . Agency" and substituted "Those" for "Such" before "amounts" at beginning of second sentence.


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7204.5. Deduction of tax by Controller. [Repealed by Stats. 1989, Ch. 1027, in effect September 29, 1989, operative January 1, 1990.]

7204.5. Oak barrels; offset portion; Napa. [Repealed by Stats. 2007, Ch. 342 (AB 1748), in effect January 1, 2008.]

7204.6. Repayment of tax by Controller. [Repealed by Stats. 1989, Ch. 1027, in effect September 29, 1989, operative January 1, 1990.]

7205. Place of sale. (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 .

History.—Stats. 1961, p. 3113, operative January 1, 1962, substituted "retail sales are consummated at the place of business" for "retail sales shall be presumed to have been consummated at the place of business" and made minor changes for clarity. Stats. 1998, Ch. 1027, in effect September 30, 1998, operative January 1, 1999, added subdivision letter designation (a) before first paragraph, added "or her" after "or his" in the first sentence, and substituted "those" for "such" twice in the second sentence therein; created new subdivision (b) with the former third sentence of the former first paragraph and added subparagraph number designation (1) before "In the event", substituted "state" for "State", and added ", subject to paragraph (2)" after "part shall" therein; and added subparagraph (2) therein. Stats. 2005, Ch. 391 (AB 451), in effect January 1, 2006, but operative January 1, 2008, deleted ", if both of the following conditions are met: (A) The principal negotiations for the sale are conducted in this state. (B) The retailer has more than one place of business in the state" after "to the aircraft" in paragraph (2) of subdivision (b).

Place of sale.—It is proper to divide tax from sales by a departmentalized retail store straddling a county line according to the location of each department with respect to the county line. City of Pomona v. State Board of Equalization (1959) 53 Cal.2d 305.

Pooling procedure valid.—The pooling procedure adopted by the State Board of Equalization for the allocation of local sales tax revenues imposed in connection with construction contractors is valid. City of San Joaquin v. State Board of Equalization (1970) 9 Cal.App.3d 365.


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7205.1. Place of sale: leases of motor vehicles. (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.

History.—Added by Stats. 1995, Ch. 676, in effect January 1, 1996. Stats. 1998, Ch. 140, in effect January 1, 1999, deleted comma after "415 of the Vehicle Code)", and added "by a dealer or leasing company" in subdivision (a); added "California" after "lessor is a", and added "or a leasing company" after "Code)" in paragraph (1) of subdivision (a); created new paragraph (2) with the former second sentence of paragraph (1) and substituted "paragraph (1) . . . so described," for this paragraph, purchases the vehicle from a dealer (as defined in Section 285 of the Vehicle Code)," after "described in", and substituted "person" for "dealer" after "thereunder) is" in subdivision (a); created new paragraph (3) with the former third sentence of paragraph (1) and substituted "subdivision" for "paragraph" after "by this" in subdivision (a); deleted former paragraph (2) of subdivision (a) which provided, "If the lessor is not a person described in paragraph (1) and purchases the vehicle leased from a source other than as described in paragraph (1), the use tax shall be reported to and distributed through the countywide pool of the county in which the lessee resides."; created new paragraph (1) in subdivision (d) beginning with "City" and substituted "following definitions shall apply:" for "word ‘city’ " after "section, the" therein; added subparagraph (2) to subdivision (d); and added subdivision (e). Stats. 2002, Ch. 775, (SB 2092), in effect January 1, 2003, substituted "as defined in subdivision (d)" for "(as defined in Section 415 of the Vehicle Code)" in subdivision (a); added new paragraph (2) to subdivision (d), and renumbered former paragraph (2) as (3) therein.

7207. Adoption of local tax not required. 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.

7208. Limitations; use tax. [Repealed by Stats. 2007, Ch. 342 (AB 1748), in effect January 1, 2008.]


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7209. Limitations; redistributions. 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.

History.—Added by Stats. 1959, p. 4268, in effect September 18, 1959.

Note.—Section 3 of Chapter 1785, Statutes of 1959, provides that the time limitation established by this section shall not apply to redistributions where the board obtains knowledge of the improper distribution prior to September 18, 1959.

Writ of Mandate Denied.—Petitioner City of Culver City sought a writ of mandate directing the Board of Equalization to transmit to it all local sales and use taxes collected by the Board from 1956 through 1969 and erroneously distributed to the City of Los Angeles as a result of the misidentification by the Board of a taxpayer located in Culver City. Upon being notified of its error the Board redistributed a portion of the tax but, pursuant to Revenue and Taxation Code Section 7209, the Board made no redistribution as to amounts originally distributed earlier than two quarterly periods prior to the period in which the Board obtained knowledge of its error. During the pendency of a legal action against Los Angeles for the additional distributions, Culver City instituted a mandamus proceeding. The court, in holding that the writ should not issue, found, in accordance with the general rule, that mandamus was not an appropriate remedy for enforcing the contractual obligation of the Board, and was also inappropriate since the action did not call for the performance of necessary ministerial duties by the Board and since petitioner had an adequate legal remedy in its pending action against the City of Los Angeles. The court found further that the trial court had abused its discretion in issuing the alternative writ in not allowing the Board and the city the statutorily prescribed five-day period within which to reply to petitioner's application. City of Culver City v. State Board of Equalization (1972) 29 Cal.App.3d 404.

Decision reallocating local sales tax revenue final in absence of timely administrative appeal.—The City of Fillmore's failure to file timely an administrative appeal caused BOE's decision reallocating local sales tax revenues to become final. Absent a timely administrative appeal, BOE had a ministerial duty to reallocate the revenues. The court further held that the exhaustion of remedies doctrine did not preclude the petitioning cities (Industry and Livermore) from seeking mandate relief by way of intervention, because BOE's jurisdiction to consider an administrative appeal was disputed. City of Fillmore v. Board of Equalization (2011) 194 Cal.App.4th 716.

7210. Permissible local tax; motor vehicle fuel tax. 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.

History.—Added by Stats. 1977, Ch. 956, operative January 1, 1978. Stats. 1981, Ch. 541, in effect September 17, 1981, added "or Part 4 . . . division" after "Code" in the first sentence.

7211. Permissible local tax; transactions and use tax.

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).

History.—Added by Stats. 1977, Ch. 672, operative January 1, 1978. Stats. 2007, Ch. 342 (AB 1748), in effect January 1, 2008, substituted "city, county, or city and county that" for "county which" after "ordinance of any" and substituted "administered by . . . 7251)" for "pursuant to Article 13 (commencing with Section 29560) of Chapter 2 of Division 3 of Title 3 of the Government Code"' after "tax ordinance."

7212. Cost of administration; payment by redevelopment agency. 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.

History.—Added by Stats. 1981, Ch. 951, in effect January 1, 1982.


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