Sales and use taxes: farm equipment and machinery.

Plain English Breakdown

The official source does not provide specific details on performance indicators or data collection requirements for the bill's impact.

Farm Equipment Tax Exemption

AB-2192 removes the exclusion of farm equipment and machinery from certain local sales and use taxes, allowing these items to be exempt in both state and local tax laws until January 1, 2032.

What This Bill Does

• Removes a rule that stops farm equipment and machinery from being exempt from certain local sales and use taxes.
• Allows the exemption for farm equipment and machinery to apply to all types of sales and use taxes in California.
• Requires the state to pay back counties and cities if they lose money because farmers don't have to pay tax on their equipment.

Who It Names or Affects

• Farmers who buy farm equipment and machinery
• Counties and cities that collect sales and use taxes

Terms To Know

Sales and Use Tax Law

The law that says what things are taxed in California.

Bradley-Burns Uniform Local Sales and Use Tax Law

A law that lets cities and counties make their own sales and use taxes, but they must follow the rules of the main Sales and Use Tax Law.

Limits and Unknowns

• The bill only applies until January 1, 2032.
• It is not clear how much money will be reimbursed to counties and cities from the state.

Official Summary Text

AB 2192, as amended, Jeff Gonzalez.
Sales and use taxes: farm equipment and machinery.
Existing state sales and use tax laws impose a tax on retailers measured by the gross receipts from the sale of tangible personal property sold at retail in this state of, or on the storage, use, or other consumption in this state of, tangible personal property purchased from a retailer for storage, use, or other consumption in this state. The Sales and Use Tax Law provides various exemptions from those taxes, including an exemption for the sale of, or the storage, use, or consumption of, farm equipment and machinery, and the parts thereof, purchased for use by a qualified person to be used primarily in producing and harvesting agricultural products.
The Bradley-Burns Uniform Local Sales and Use Tax Law authorizes counties and cities to impose local sales and use taxes in conformity with the Sales and Use Tax Law, and existing
laws authorize districts, as specified, to impose transactions and use taxes in accordance with the Transactions and Use Tax Law, which generally conforms to the Sales and Use Tax Law. Amendments to the Sales and Use Tax Law are automatically incorporated into the local tax laws.
Existing law excludes the tax exemption described above from being incorporated into certain local taxes pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law.
This bill
would
would, until January 1, 2032,
delete that provision.
Existing law requires the state to reimburse counties and cities for revenue losses caused by the enactment of sales and use tax exemptions.
This bill would make an appropriation from the General Fund to the Controller to make the reimbursements to counties and cities.
Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific purposes that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.
This bill also would include additional information required for any bill authorizing a new tax expenditure.
This bill would take effect immediately as a tax levy.

Current Bill Text

Download Bill PDF