Assembly Bill No. 28
Passed the Assembly June15, 2011
Chief Clerk of the Assembly
Passed the Senate June15, 2011
Secretary of the Senate
This bill was received by the Governor this dayof , 2011, at o
’
clock
m
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Private Secretary of the Governor
CHAPTERAn act to amend Section 6203 of the Revenue and TaxationCode, relating to taxation, and making an appropriation therefor,to take effect immediately, bill related to the budget.
legislative counsel
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s digest
AB28, Blumen
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eld.State Board of Equalization:administration: retailer engaged in business in this state.The Sales and Use Tax Law imposes a tax on retailers measuredby the gross receipts from the sale of tangible personal propertysold at retail in this state, or on the storage, use, or otherconsumption in this state of tangible personal property purchasedfrom a retailer for storage, use, or other consumption in this state,measured by sales price. That law de
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nes a
“
retailer engaged inbusiness in this state
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to include retailers that engage in speci
f
edactivities in this state and requires every retailer engaged inbusiness in this state and making sales of tangible personal propertyfor storage, use, or other consumption in this state to register withthe State Board of Equalization and to collect the tax from thepurchaser and remit it to the board.This bill would further de
f
ne a retailer engaged in business inthis state as a retailer that has substantial nexus with this state anda retailer upon whom federal law permits the state to impose a usetax collection duty. The bill would also include speci
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ed retailersas retailers engaged in business in this state and would eliminatean exclusion.This bill would include in the de
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nition of a retailer engaged inbusiness in this state any retailer entering into agreements underwhich a person or persons in this state, for a commission or otherconsideration, directly or indirectly refer potential purchasers,whether by an Internet-based link or an Internet Web site, orotherwise, to the retailer, provided the total cumulative sales pricefrom all sales by the retailer to purchasers in this state that arereferred pursuant to these agreements is in excess of $10,000 withinthe preceding 12 months, and provided further that the retailer hascumulative sales of tangible personal property to purchasers inthis state of over $500,000, within the preceding 12 months, except
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as speci
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ed. This bill would also provide that a retailer enteringinto speci
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ed agreements to purchase advertising is not a retailerengaged in business in this state and would de
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ne a retailer toinclude an entity af
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liated with a retailer under federal income taxlaw, as speci
f
ed. This bill would further provide that theseprovisions would not apply if the retailer can demonstrate that thereferrals would not satisfy speci
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ed United States constitutionalrequirements, as provided.This bill would also include as a retailer engaged in business inthis state as a retailer that is a member of a commonly controlledgroup, as de
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ned under the Corporation Tax Law, and a memberof a combined reporting group, as de
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ned, that includes anothermember of the retailer
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s commonly controlled group that, pursuantto an agreement with or in cooperation with the retailer, performsservices in this state in connection with tangible personal propertyto be sold by the retailer.This bill would provide that the provisions of this bill areseverable.This bill would appropriate $1,000 from the General Fund tothe State Board of Equalization for administrative operations.The California Constitution authorizes the Governor to declarea
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scal emergency and to call the Legislature into special sessionfor that purpose. Governor Schwarzenegger issued a proclamationdeclaring a
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scal emergency, and calling a special session for thispurpose, on December 6, 2010. Governor Brown issued aproclamation on January 20, 2011, declaring and reaf
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rming thata
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scal emergency exists and stating that his proclamationsupersedes the earlier proclamation for purposes of thatconstitutional provision.This bill would state that it addresses the
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scal emergencydeclared and reaf
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rmed by the Governor by proclamation issuedon January 20, 2011, pursuant to the California Constitution.This bill would declare that it is to take immediate effect as abill providing for appropriations related to the Budget Bill.
Appropriation: yes.
The people of the State of California do enact as follows:
SECTION 1.Section 6203 of the Revenue and Taxation Codeis amended to read:
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