Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2013
 

Revenue and Taxation Code

Property Taxation

Part 4. Levy of Tax

Chapter 3. Reimbursement for Costs Mandated by the State

Article 2. General Provisions

Section 2230

2230. State reimbursement for sales and use tax exemption enacted after January 1, 1973. The state shall annually reimburse cities and counties for the net loss of revenue from each statute enacted after January 1, 1973, which provides for a sales or use tax exemption. The reimbursement shall be made, when funds have been appropriated by the Legislature, as follows:

(a) Twenty percent of the local net loss shall be distributed to the counties in the same ratio as the total amount of sales and use taxes collected in each county is to the whole. This amount of money shall be deposited by the board of supervisors in the local transportation fund established pursuant to Section 29530 of the Government Code. These moneys shall become part of the local transportation fund and shall be appropriated in the same manner and for the same purposes specified in Section 29531 of the Government Code.

(b) Eighty percent of the local net loss shall be distributed to cities and counties in the same ratio as provided in Section 30462 for the distribution of moneys from the Cigarette Tax Fund.

The distribution of reimbursement moneys pursuant to this section shall be made at the same time and in the same manner as provided in Section 30462 for the distribution of moneys from the Cigarette Tax Fund.

For purposes of this section the Director of Finance shall estimate the annual net loss of revenue to local agencies. In the case of legislative bills which provide for a sales or use tax exemption, the Director of Finance shall prepare an estimate of the annual net loss of revenue to local agencies during the initial fiscal year in which the bill becomes effective. An appropriation consistent with such estimate shall be included in the bill. In subsequent fiscal years an appropriation to reimburse local agencies as required by this section shall be included in the State Budget. The amount included each year in the State Budget shall be changed by the estimated percentage change from the prior year, in the amount of revenue distributed to cities and counties pursuant to Part 1.5 (commencing with Section 7200) of Division 2.

For purposes of this section the net loss of revenue does not include (i) potential revenue from the sale or use of property of a type which was not being taxed on January 1, 1973, or (ii) the amount which would have been deducted by the Board of Equalization pursuant to Section 7204.3 for the cost of administering local sales and use tax ordinances.

In lieu of distributing reimbursement revenue as provided in this section, any statute exempting property from sales or use tax may provide an alternative procedure for such distribution.

Any claim alleging that the reimbursement requirements of this section have not been complied with shall be presented directly to the Legislature and the provisions of Sections 905.2 and 945.4 of the Government Code shall not apply thereto.

History.—Stats. 1977, Ch. 309, in effect July 8, 1977 added the sixth paragraph.