NR# 64-P
Date: December 28, 2001
Customer & Taxpayer Service Division
2001 Was a Memorable Year for Tax Law Changes
Claude Parrish, Chairman, State Board of Equalization
(BOE) remarked today that a number of changes were made
to tax laws administered by the BOE during the 2001 legislative
session. Legislative changes take effect on January 1, 2002,
unless otherwise noted.
Highlights are as follows:
Assembly Bill 426, effective September 1,
2001, provides a number of partial sales tax exemptions
related to the agricultural sector as follows:
-
Sales and purchases of farm equipment,
machinery, and their parts are now partially exempt when
sold to, or purchased by, qualified persons who are engaged
in the business of producing and harvesting agricultural
products as identified in Standard Industrial Classification
Codes, or when sold to qualified persons that assist those
so identified.
- Sales and purchases of equipment, machinery, and their
parts designed primarily for off-road use in commercial
timber harvesting are now partially exempt when sold to,
or purchased by, a qualified person engaged in commercial
timber harvesting operations.
- Sales and purchases of diesel fuel used in farming activities
as defined in Internal Revenue Code Section 263A, or food
processing, are now partially exempt. Sales and purchases
of diesel fuel used in farming activities also include the
diesel fuel used in the transportation of farm products
to the marketplace.
- Sales and purchases of racehorse breeding stock are now
partially exempt if purchased solely for breeding purposes.
Note: These partial exemptions only
apply to the state portion of the sales and use tax rate,
currently 4.75% through December 31, 2001, and 5% beginning
January 1, 2002. These exemptions do not apply to any local,
city, county, or district taxes.
AB 426 also provides a state and local sales
and use tax exemption for sales and purchases of LPG when
delivered into a tank of 30 gallons or more to either a
qualified residence for household use, or to a qualified
person to be used in producing and harvesting agricultural
products.
- Senate Bill 394 provides that the Internet Tax Freedom
Act, originally set to expire on January 1, 2002, will remain
in effect until January 1, 2004, unless the California Commission
on Tax Policy in the New Economy fails to submit a specified
report, in which case the California Internet Tax Freedom
Act will be repealed on January 1, 2003. The "California
Internet Tax Freedom Act" was created by the Legislature
in 1998 to prohibit the imposition, assessment, or attempt
to collect any new local tax or fee on Internet access,
on-line computer services, or the use thereof, except as
specified. This prohibition does not include any existing
tax, including any sales and use tax, business license tax,
or utility user tax that is imposed in a uniform and nondiscriminatory
manner, as specified. Therefore, sales and purchases via
the Internet continue to remain subject to sales and use
tax.
- Assembly Bill 645, for property taxes, extends the final
date for filing an assessment appeal from September 15th
to November 30th in those counties where the county assessor
does not send value notices to taxpayers of the assessed
value of their real property by August 1.
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