AB 1499: Horse racing: state-designated fairs: allocation of revenues: gross receipts for sales and use tax.

The Horse Racing Law provides that any unallocated balance from the total revenue received by the Department of Food and Agriculture pursuant to that law, except as specified, is hereby appropriated without regard to fiscal years for allocation by the Secretary of Food and Agriculture for capital outlay to California fairs, including state-designated fairs, for among other things, fair projects involving public health and safety, and projects that are required to protect fair property. That law also provides that a portion of these funds may be allocated to California fairs for general operational support.

This bill would, beginning July 1, 2018, require a return filed with the California Department of Tax and Fee Administration (CDTFA) to report gross receipts for sales and use tax purposes to segregate the gross receipts of the seller and the sales price of the property on a line or a separate form as prescribed by the CDTFA when the place of sale in this state or for use in this state is on or within the real property of a state-designated fair, as defined, or any real property of a state-designated fair that is leased to another party. The bill would require the CDTFA to report the amount of the total gross receipts segregated on the returns filed pursuant to these provisions to the Department of Finance on or before November 1 of each year. The bill would require the CDTFA to estimate the total gross receipts segregated for the 201920 fiscal year by January 31, 2019, based on the 3rd quarter of 2018, and would require that an amount equal to ³/₄ of 1% of this estimated amount be included in the Governors revised budget in May 2019 for allocation to fairs pursuant to the provisions described above. The bill would require the CDTFA to reconcile this first-year estimate with actual return data from the full 201819 fiscal year, and to then adjust this figure as appropriate as the amount to be reported to the Department of Finance on November 1, 2019.

The bill would require that an amount equal to ³/₄ of 1% of the total amount of gross receipts reported to the Department of Finance be included in the next annual Governors Budget for the Department of Food and Agriculture for allocation to fairs pursuant to the provisions described above. The bill would require, upon the enactment of the annual Budget Act, that this amount be transferred by the Controller to the Fair and Exposition Fund, which is continuously appropriated, and would allocate these moneys to state-designated fairs for specified fair projects and subject to certain conditions. The bill would require the CDTFA to be paid the actual cost for administering those provisions, as specified.

By creating a new source of revenue to be deposited into a continuously appropriated fund, the bill would make an appropriation.