Sales and use taxes: exclusion: pawnbrokers: transfer of vested property.

Plain English Breakdown

The official source does not provide specific details on the amount of money local governments might lose due to this tax exclusion.

Pawnbroker Property Transfers Tax Exclusion

AB-2641 extends the exclusion of sales and use taxes for pawnbrokers when transferring pledged property back to borrowers until January 1, 2032.

What This Bill Does

• Extends the tax exemption for pawnbrokers who transfer pledged property back to borrowers without charging a sale price until January 1, 2032.
• Requires detailed information about how this tax exclusion will achieve certain goals and objectives.
• Prevents local governments from getting state money to replace lost sales and use tax revenue due to this bill.

Who It Names or Affects

• Pawnbrokers who transfer pledged property back to borrowers without charging a sale price.
• Local government agencies that collect sales and use taxes.

Terms To Know

Tax Exemption

A rule that allows certain people or businesses not to pay some or all of a tax on specific items or activities.

Vested Property

Property that has been pledged as security for a loan and is returned to the borrower when they repay the loan.

Limits and Unknowns

• The bill does not specify how much money local governments will lose from this tax exclusion.
• It's unclear if there are other similar laws or regulations that might affect pawnbrokers differently.

Official Summary Text

AB 2641, as amended, Michelle Rodriguez.
Sales and use taxes: exclusion: pawnbrokers: transfer of vested property.
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, 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. Existing law defines “sale” and “purchase” for these purposes and provides certain exclusions from those definitions.
Existing law, until January 1, 2027, excludes the transfer of vested property by a pawnbroker to a person who pledged the property to the pawnbroker as security for a loan, if specified requirements are met, from the definition of “sale” and “purchase,” thus excluding that transfer from imposition of sales and use tax.
This bill would
indefinitely
extend the exclusion of the transfer of vested property by a pawnbroker to the person who pledged it, as described
above.
above, until January 1, 2032.
Existing law requires a bill authorizing a sales and use tax exemption to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.
This bill would include that additional information required for the above sales and use tax exclusion.
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 requires the state to reimburse counties and cities for revenue losses caused by the enactment of sales and use tax exemptions.
This bill would provide that, notwithstanding Section 2230 of the Revenue and Taxation Code, no appropriation is made and the state shall not reimburse any local agencies for sales and use tax revenues lost by them pursuant to this bill.
This bill would take effect immediately as a tax levy.

Current Bill Text

Download Bill PDF