Existing law requires a tax return filed with the California Department of Tax and Fee Administration (CDTFA) that reports 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 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. Existing law requires, on or before November 1 of each year, the CDTFA to report to the Department of Finance the amount of the total gross receipts segregated on these tax returns for the prior fiscal year, and that ³/₄ of 1% of the total gross receipts be included in the next annual Governors Budget for use by the Department of Food and Agriculture for allocation to fairs and that those funds be transferred by the Controller to the Fair and Exposition Fund, which is continuously appropriated, as prescribed. Existing law provides that certain revenues deposited into the Fair and Exposition Fund are appropriated without regard to fiscal years for allocation by the Secretary of Food and Agriculture for capital outlay to California fairs, as specified.

This bill would increase the amount of the total gross receipts required to be included in the next annual Governors Budget for use by the Department of Food and Agriculture and transferred to the Fair and Exposition Fund, as specified, from ³/₄ of 1% to 3.5%. From the funds subject to allocation by the Secretary of Food and Agriculture for capital outlay to California fairs, which the bill would increase by adding this 3.5% gross receipts transfer, the bill would require, each fiscal year, the sum of $2,500,000, or an amount equal to 5% of the fund, whichever is greater, to be paid to the department for purposes of providing administrative services to fairs, as specified. The bill would also require, each fiscal year, from the amounts available in the Fair and Exposition Fund after the payment made to the department, the sum of $500,000 to be paid to the nonprofit organization representing all fairs in the network of California fairs for purposes of providing services to fairs, as specified. The bill would make other nonsubstantive changes regarding appropriations to the department for fairs.

This bill would require the Secretary of Food and Agriculture, by May 15 of each year, to prepare an annual expenditure plan for funds from the Fair and Exposition Fund for review and approval by the Joint Committee on Fairs Allocation and Classification, as provided.

By increasing the amounts to be deposited into the Fair and Exposition Fund, which is continuously appropriated, and by appropriating these amounts for new purposes, the bill would make an appropriation.

Existing law requires a tax return filed with the California Department of Tax and Fee Administration (CDTFA) that reports 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 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. Existing law requires, on or before November 1 of each year, the CDTFA to report to the Department of Finance the amount of the total gross receipts segregated on these tax returns for the prior fiscal year, and that ³/₄ of 1% of the total gross receipts be included in the next annual Governors Budget for use by the Department of Food and Agriculture for allocation to fairs and that those funds be transferred by the Controller to the Fair and Exposition Fund, which is continuously appropriated, as prescribed. Before any allocation is made to fairs from those funds, existing law requires the CDTFA to be paid the actual cost from those funds for administering these provisions. Existing law provides that certain revenues deposited into the Fair and Exposition Fund are appropriated without regard to fiscal years for allocation by the Secretary of Food and Agriculture for capital outlay to California fairs, as specified.

This bill would also require, before any allocation to fairs is made from these funds, the Department of Food and Agriculture to be paid the cost of administering the allocation of these funds to fairs, as determined by the Secretary of Food and Agriculture, in an amount not to exceed 5% of the funds. By expanding the use of continuously appropriated funds, the bill would make an appropriation. increase the amount of the total gross receipts required to be included in the next annual Governors Budget for use by the Department of Food and Agriculture and transferred to the Fair and Exposition Fund, as specified, from ³/₄ of 1% to 3.5%. From the funds subject to allocation by the Secretary of Food and Agriculture for capital outlay to California fairs, which the bill would increase by adding this 3.5% gross receipts transfer, the bill would require, each fiscal year, the sum of $2,500,000, or an amount equal to 5% of the fund, whichever is greater, to be paid to the department for purposes of providing administrative services to fairs, as specified. The bill would also require, each fiscal year, from the amounts available in the Fair and Exposition Fund after the payment made to the department, the sum of $500,000 to be paid to the nonprofit organization representing all fairs in the network of California fairs for purposes of providing services to fairs, as specified. The bill would make other nonsubstantive changes regarding appropriations to the department for fairs.

Existing law requires a tax return filed with the California Department of Tax and Fee Administration (CDTFA) that reports 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 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. Existing law requires, on or before November 1 of each year, the CDTFA to report to the Department of Finance the amount of the total gross receipts segregated on these tax returns for the prior fiscal year, and that ³/₄ of 1% of the total gross receipts be included in the next annual Governors Budget for use by the Department of Food and Agriculture for allocation to fairs and that those funds be transferred by the Controller to the Fair and Exposition Fund, which is continuously appropriated, as prescribed. Before any allocation is made to fairs from those funds, existing law requires the CDTFA to be paid the actual cost from those funds for administering these provisions.

This bill would also require, before any allocation to fairs is made from these funds, the Department of Food and Agriculture to be paid the cost of administering the allocation of these funds to fairs, as determined by the Secretary of Food and Agriculture, in an amount not to exceed 5% of the funds. By expanding the use of continuously appropriated funds, the bill would make an appropriation.

Date of Hearing: July 10, 2023

ASSEMBLY COMMITTEE ON REVENUE AND TAXATION

Jacqui Irwin, Chair

SBPCA Bill Id:SB 624

Author:(Alvarado-Gil) – As Amended Ver:June 26, 2023

2/3 vote. Urgency. Fiscal committee.

SENATE VOTE: 37-0

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

SUMMARY: Increases, from 0.75% to 3.5%, the percentage of gross receipts from sales at state-designated fairs used to calculate the annual budget augmentation for the Department of Food and Agriculture (DFA) for allocation to fairs via the Fair and Exposition Fund (Fund). Specifically, this bill:

1. Finds and declares that fairgrounds serve the needs of the citizens of California in times of emergency by assisting federal, state, and local public health and safety agencies with emergency preparedness and response, and in times of celebration by providing a focal point for cultural, educational, and social interaction for the people of their local communities throughout the state.
2. Provides that each fiscal year (FY) the sum of $2.5 million, or an amount equal to 5% of the Fund, whichever is greater, must be paid to the DFA for purposes of providing administrative services to fairs, as specified.
3. Provides that each FY, from the amounts available in the Fund after payment of the above amount, the sum of $500,000, adjusted annually for inflation, must be paid to the nonprofit organization representing all fairs in the network of California fairs for purposes of providing services to fairs, as specified.
4. Requires the Secretary of Food and Agriculture, by May 15 of each year, to prepare an annual expenditure plan for funds from the Fund for review and approval by the Joint Committee on Fairs Allocation and Classification, as provided.
5. Takes immediate effect as an urgency measure.

EXISTING LAW:

1. Requires a tax return filed with the California Department of Tax and Fee Administration (CDTFA) reporting gross receipts for sales and use tax (SUT) purposes to segregate the gross receipts on a line or a separate form when the place of sale in this state is on the real property of a state-designated fair. (Business and Professions Code Section 19620.15.)
2. Requires, on or before November 1 of each year, the CDTFA to report to the Department of Finance (DOF) the amount of the total gross receipts segregated on returns for the prior FY. 0.75% of these gross receipts must then be included in the next annual Governor's Budget for use by the DFA for allocation to fairs. Specifically, these funds must be transferred by the State Controller to the Fund, which is continuously appropriated, as prescribed. (Id.)

FISCAL EFFECT: Unknown, but in excess of $150,000 per year.

COMMENTS:

1. The author has provided the following statement in support of this bill:

California's fairs are the embodiment of our communities. They provide educational, social, and economic insights from each region of the state. However, many of our fairs are critically underfunded and in need of repairs to their infrastructure and emergency management facilities. By increasing the funding available to fairs and limiting administrative costs, SB 624 will provide the needed support for our fairs to thrive.

1. Supporters of this bill note the following:

Fairgrounds are an important public asset, especially important in rural areas, often providing the only space available for enhancing commercial enterprises, hosting affordable and accessible community gatherings, and providing invaluable emergency support. They are also substantial economic drivers, providing a wide variety of services and supporting hundreds of small businesses that rely on a solid network to create thousands of jobs and millions in tax revenue for California. The fair industry reflects California's diversity like no other. Women, minorities, and veterans are all represented in this humble business sector, and they all rely on the solvency of the fairground.

For more than 75 years, California's fairs had a stable source of funding from horse racing license fees and supplementary General Fund resources. These fund sources were eliminated in the 2011-12 state budget, requiring all fairs to become self-sufficient. With the lapse in funding, many fairs suffered from deferred maintenance, while concurrently becoming more necessary as climactic and community emergencies increased. In response in 2017, the Legislature authored and the Governor signed AB 1499, which offered an opportunity for fairs to retain three-quarters of 1% (0.75%) of sales and use tax revenues generated on fairgrounds. Through these limited revenues some fairs have been able to benefit, however the amount of revenue is not sufficient to serve as a statewide fiscal solution as currently crafted. And as a result, many of our fairgrounds and staff at the California Department of Food and Agriculture (CDFA) remain in jeopardy.

1. Committee Staff Comments:
   1. General background: In 2017, the Governor signed into law AB 1499 (Gray), Chapter 798, Statutes of 2017, to provide a dedicated funding source for state fairs. Specifically, the law now requires that SUT returns filed with the CDTFA must segregate the retailer's gross receipts when the place of sale in this state is at a state-designated fair, as defined. On or before November 1 of each year, CDTFA must report to DOF the total gross receipts segregated on returns for the prior FY. An amount equal to 0.75% of the total gross receipts for the prior FY must then be included in the next annual Governor's Budget for DFA for allocation to fairs pursuant to Business and Professions Code Section 19620.2.
   2. What would this bill do? The main provision of this bill would simply increase, from 0.75% to 3.5%, the percentage of gross receipts from sales at state-designated fairs used to calculate the annual budget augmentation for the DFA for allocation to fairs. According to the author, California's network of fairs is critically underfunded and many fairs are in need of repairs to their infrastructure and emergency management facilities. Specifically, the author's office notes:

The Senate Appropriations Committee analysis for AB 1499 states "CDTFA estimates that this bill would result in an annual transfer of $14.9 million from the General Fund to CDFA's Fair and Exposition Fund". Since the initial allocation, this number has not been achieved. Rather, in 2022, the annual transfers from AB 1499 resulted in $4.2 million to be distributed amongst the 78 fairgrounds in California. At the same time, the deferred maintenance needs of the fairgrounds has grown to exceed $200 billion (according to CDFA).

By increasing the apportionment of sales and use tax revenues generated on fairgrounds to be retained and redistributed to fairs, SB 624 allows additional funds to support outstanding deferred maintenance needs on [uniquely] situated, but not otherwise financially supported fairgrounds.

• 1. The benefits and perils of earmarking: Proponents of this bill might argue that this bill provides a stable and much-needed source of funding for California's network of state fairs. Critics, however, might contend that the practice of earmarking restricts the Legislature's ability to fund vital state programs in a holistic manner through the annual budgetary process. Critics might also argue that this bill elevates the needs of state fairs above other vital programs designed to address basic human necessities, ranging from health care to public safety. It should be noted that, however, that while this bill calls for an ongoing augmentation of funding for state fairs in future years, these augmentations would still be subject to adjustment and approval in the annual budget process.
  2. Amendments proposed by the author: The author's office has noted that, in an effort to streamline this bill's focus, the author plans to take amendments to strike those portions of the bill providing that:
     1. Each FY the sum of $2.5 million be paid to the DFA for purposes of providing administrative services to fairs, as specified; and,
     2. Each FY, from the amounts available in the Fund after payment of the above amount, the sum of $500,000, adjusted annually for inflation, must be paid to the nonprofit organization representing all fairs in the network of California fairs for purposes of providing services to fairs, as specified.
  3. Double referral: This bill was recently heard in the Assembly Committee on Agriculture, and passed that committee, 10-0, on June 21, 2023. For additional discussion of this bill's provisions, please refer to the analysis prepared by the Assembly Committee on Agriculture.

REGISTERED SUPPORT / OPPOSITION:

Support

Association of California Egg Farmers

Calaveras County Chamber of Commerce

California Association of Wheat Growers

California Bean Shippers Association

California Grain & Feed Association

California Pear Growers Association

California Seed Association

California State Association of Counties

California State Floral Association

California State Treasurer Fiona Ma

MACT Health Board, Inc.

Pacific Egg and Poultry Association

RS Management Group, Inc.

Rural County Representatives of California

Stanislaus County Fair

Trinity County Fair Association

Tuolumne County Supervisor Jaron E. Brandon

Western Fairs Association

Opposition

None on file

Analysis Prepared by: M. David Ruff / REV. & TAX. / (916) 319-2098

Date of Hearing: June 21, 2023

ASSEMBLY COMMITTEE ON AGRICULTURE

Robert Rivas, Chair

SBPCA Bill Id:SB 624

Author:(Alvarado-Gil) – As Amended Ver:May 25, 2023

SENATE VOTE: 37-0

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

SUMMARY: This bill allows the California Department of Food and Agriculture (CDFA) to receive reimbursement for the cost of allocating revenue received from sales tax collected on state-designated fairgrounds to fairs, not to exceed 5 percent or $2,500.000 of the funds; and increase the percentage of fair sales tax from .75 percent to 3.5 percent to that can be allocated to fairs in the state. Specifically, this bill:

1. Makes legislative findings and declarations that fairgrounds serve the needs of the citizens of California in times of emergency by assisting federal, state, and local public health and safety agencies with emergency preparedness and response, and in times of celebration by providing a focal point for cultural, educational, and social interaction for the people of their local communities throughout the state.
2. Increases, from .75 percent to 3.5 percent, of the total amount of gross receipts, or adjusted gross receipts from sales tax at fairs included in the annual Governor’s Budget for CDFA to administer the allocation of funding to the fairs.
3. Requires the sum of two million five hundred thousand dollars ($2,500,000), or an amount equal to 5 percent of the fund, whichever is greater, to be paid to CDFA for purposes of providing administrative services to fairs as specified.
4. Requires each fiscal year, the sum of five hundred thousand dollars ($500,000), adjusted annually for inflation with the approval of the Secretary of CDFA, to be paid to the nonprofit organization representing all fairs in the network of California fairs for purposes of providing services to fairs, as specified.
5. Requires CDFA to, by May 15 of each year, prepare an annual expenditure plan for funds available from the Fair and Exposition Fund for review and approval by the Joint Committee on Fairs Allocation and Classification.
6. Makes technical and conforming changes.

EXISTING LAW:

1. Requires a tax return filed with the California Department of Tax and Fee Administration (CDTFA) that reports 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 when the place of sale in this state is on or within the real property of a state-designated fair or any real property of a state-designated fair that is leased to another party. Business and Professions Code (BPC) 19620.15.
   
2. Requires, on or before November 1 of each year, that CDTFA report to the Department of Finance the amount of the total gross receipts for sales and use tax. BPC 19620.15
   
3. Requires .75 percent of the total amount of gross receipts, or adjusted gross receipts, for the prior fiscal year reported to the Department of Finance shall be included in the next annual Governor’s Budget for CDFA to administer the allocation of funding to the fairs. BPC 19620.15
   
4. Requires CDTFA to be reimbursed for the actual cost for administering the provisions of this section from the funds appropriated pursuant to subdivision (e) before allocation of funding to the fairs. BPC 19620.15
   
5. Designates CDFA as the entity responsible for ensuring the integrity of the Fair and Exposition Fund and administering allocations from the fund to the network of California Fairs, among other duties. BPC 19620

FISCAL EFFECT: Unknown.

COMMENTS: Fairs in California began in 1854, and have since grown to encompass 78 fairs statewide. The network of California fairs is composed of 52 district agricultural associations (DAA), 23 county fairs, two citrus fruit fairs, and the California Exposition and State Fair (Cal Expo). DAAs are state government entities governed by a nine-member gubernatorial appointed board of directors. In contrast, county fairs are either directly operated by counties or not-for-profit organizations; citrus fruit fairs are not-for-profit organizations; and Cal Expo is a state agency.

The Division of Fairs and Expositions within CDFA provides fiscal and policy oversight for the network of California fairs, and the Department of General Services (DGS) provides oversight for use of state property, procurement, and services contracts. Satellite wagering license fees are deposited into a separate account in the Satellite Wagering Account (SWA), and continuously appropriated for specified fair-related purposes, including the payment of expenses incurred in establishing and operating satellite-wagering facilities at fairs.

Prior to 2009, license fees imposed on horse racing wagers were deposited into the Fairs and Exposition Fund and the SWA, which supports the annual budget of the California Horse Racing Board, and supplements California fairs. However, in 2009, the Legislature shifted the horse racing industry's obligation to fund fairs through license fees imposed on wagers to the General Fund, instead providing an annual continuous appropriation of $32 million from the General Fund to support fairs (SBx2 16, Ashburn). However, the 2011-12 State Budget Act eliminated General Fund contributions to the Fund, requiring DAAs and all other designated fairs to be self-sufficient as of January 1, 2012.

In 2017, AB 1499 (Chapter 798, Statutes of 2017) required retailers making sales at events held on state designated fairgrounds to segregate the gross receipts from these sales when filing their sales and use tax returns. This bill required CDTFA to calculate ¾ of 1% of those gross receipts and report that amount to DOF to be included in the Governor’s annual budget for allocation to CDFA to fund state-designated fairs. This has helped struggling fairs handle some of the financial difficulties in the past 5 years.

According to the author, The California network of fairs is critically underfunded and many fairs are in need of repairs to their infrastructure and emergency management facilities. SB 624 will increase funding available to fairs and limit the amount of AB 1499 money that is used for administrative costs and expanding the portion of sales tax revenue from fairs.

Supporter’s state, this bill helps provide a reliable funding source for California's network of fairs and offer needed financial support for projects involving public health and safety, infrastructure, deferred maintenance, and emergency management.

The committee may wish to consider an amendment to add and Urgency Clause to this bill.

REGISTERED SUPPORT / OPPOSITION:

Support

Western Fairs Association (Sponsor)
Association of California Egg Farmers
Calaveras County Chamber of Commerce
California Association of Wheat Growers
California Bean Shippers Association
California Grain & Feed Association
California Pear Growers Association
California Seed Association
California State Association of Counties
California State Floral Association
Mact Health Board INC
Monterey County Fair Vendor
Pacific Egg and Poultry Association
Rural County Representatives of California
Stanislaus County Fair
Trinity County Fair Association

Opposition

None on file

Analysis Prepared by: Victor Francovich / AGRI. / (916) 319-2084

 CONSENT  

Bill No: SB 624

Author: Alvarado-Gil (D)

Introduced: 2/16/23

Vote: 27

SENATE AGRICULTURE COMMITTEE: 3-0, 4/18/23

AYES: McGuire, Grove, Alvarado-Gil

NO VOTE RECORDED: Padilla

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

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

SOURCE: Author

DIGEST:

This bill allows the California Department of Food and Agriculture (CDFA) to receive reimbursement for the cost of allocating revenue received from sales tax collected on state-designated fairgrounds to fairs, not to exceed 5 percent of the funds.

ANALYSIS:

Existing law:

1. Requires a tax return filed with the California Department of Tax and Fee Administration (CDTFA) that reports 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 when the place of sale in this state is on or within the real property of a state-designated fair or any real property of a state-designated fair that is leased to another party (Business and Professions Code Section 19620.15(a)).
2. Requires, on or before November 1 of each year, that CDTFA report to the Department of Finance the amount of the total gross receipts for sales and use tax (Business and Professions Code Section 19620.15 (d)).
3. Requires ¾ of 1 percent of the total amount of gross receipts, or adjusted gross receipts, for the prior fiscal year reported to the Department of Finance shall be included in the next annual Governor’s Budget for CDFA to administer the allocation of funding to the fairs (Business and Professions Code Section 19620.15 (e)).
4. Requires CDTFA to be reimbursed for the actual cost for administering the provisions of this section from the funds appropriated pursuant to subdivision (e) before allocation of funding to the fairs (Business and Professions Code Section 19620.15(f)).
5. Designates the California Department of Food and Agriculture (CDFA) as the entity responsible for ensuring the integrity of the Fair and Exposition Fund and administering allocations from the fund to the network of California Fairs, among other duties (Business and Professions Code, Section 19620).

This bill:

1. Requires CDFA to be paid for the cost of administering the allocation of funds to the fairs prior to any allocation of funds to the fairs.
2. States the cost of administering the allocation of these funds to the fairs shall not exceed 5% of the funds to be allocated to the fairs.

FISCAL EFFECT: Appropriation: Yes Fiscal Com.: Yes Local: No

SUPPORT: (Verified 5/2/23)

Western Fairs Association

OPPOSITION: (Verified 5/2/23)

None received

ARGUMENTS IN SUPPORT: According to the author this bill is needed to help CDFA recoup the costs of administering the program and caps the amount not to exceed 5 percent of the funds collected.

Prepared by: Reichel Everhart / AGRI. / (916) 651-1508

5/3/23 15:16:12

**** END ****

SENATE COMMITTEE ON AGRICULTURE

Senator Melissa Hurtado, Chair

2023 - 2024 Regular

Bill No: SB 624 Hearing Date: 4/18/23

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

SUMMARY

:

This bill would allow the California Department of Food and Agriculture (CDFA) to receive reimbursement for the cost of allocating revenue received from sales tax collected on state-designated fairgrounds to fairs, not to exceed 5 percent of the funds.

BACKGROUND AND EXISTING LAW

:

Existing law:

1. Imposes sales tax on every retailer in California who is making sales of “tangible personal property for storage, use, or other consumption in this state” (Revenue and Tax Code Section 6203).
2. Requires a tax return filed with the California Department of Tax and Fee Administration (CDTFA) that reports 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 when the place of sale in this state is on or within the real property of a state-designated fair or any real property of a state-designated fair that is leased to another party (Business and Professions Code Section 19620.15(a)).
3. Requires, on or before November 1 of each year, that CDTFA report to the Department of Finance the amount of the total gross receipts for sales and use tax (Business and Professions Code Section 19620.15 (d)).
4. Requires ¾ of 1 percent of the total amount of gross receipts, or adjusted gross receipts, for the prior fiscal year reported to the Department of Finance shall be included in the next annual Governor’s Budget for CDFA to administer the allocation of funding to the fairs (Business and Professions Code Section 19620.15 (e)).
5. Requires CDTFA to be reimbursed for the actual cost for administering the provisions of this section from the funds appropriated pursuant to subdivision (e) before allocation of funding to the fairs (Business and Professions Code Section 19620.15(f)).
6. Designates the California Department of Food and Agriculture (CDFA) as the entity responsible for ensuring the integrity of the Fair and Exposition Fund and administering allocations from the fund to the network of California Fairs, among other duties (Business and Professions Code, Section 19620).

PROPOSED LAW

:

This bill:

1. Requires CDFA to be paid for the cost of administering the allocation of funds to the fairs prior to any allocation of funds to the fairs.
2. States the cost of administering the allocation of these funds to the fairs shall not exceed 5% of the funds to be allocated to the fairs.

ARGUMENTS IN SUPPORT:

According to the author this bill is needed to help CDFA recoup the costs of administering the program and caps the amount not to exceed 5 percent of the funds collected.

ARGUMENTS IN OPPOSITION:

None received

COMMENTS

:

Retailers engaged in business in California must register with the California Department of Tax and Fee Administration (CDTFA) and pay sales tax which applies to all retail sales of goods and merchandise, with a few exemptions. The sales and use tax can have three parts, depending on location: the state tax rate, the local tax rate, and any district tax rate. The statewide tax rate is 7.25 percent. Local jurisdictions can add district taxes that increase the tax owed by a seller and can range from 0.10 percent to 1.00 percent.

Current law states a tax return filed with CDTFA that reports gross receipts for sales and use tax of the sale or lease of any state-designated fair real property be reported separately and that ¾ of 1% of the total gross receipts be included in the following annual Governor’s Budget and allocated to CDFA to administer disbursement of these funds to the fairs.

Statutes enacted in 2021 allow CDTFA to recover administrative costs associated with the allocation from the funds before any allocation of funds is made to the fairs. This bill would also allow CDFA to recover the costs associated with the allocation of the funds to the fairs and caps it at no more than 5%.

RELATED LEGISLATION

:

SB 820 (Chapter 393, Statutes of 2021) required, on or before November 1 of each year, the CDTFA to report to the Department of Finance (DOF) the actual amount of the total gross receipts segregated on tax returns filed for the prior fiscal year, as specified; deletes an existing requirement that the total gross receipts are subject to review by the CDTFA for errors; and, deletes the requirement that CDTFA note any identified errors and the approximate impact of those errors on the total gross receipts, as specified.

1. AB 1499 (Chapter 798, Statutes of 2017) required retailers making sales at events held on state designated fairgrounds to segregate the gross receipts from these sales when filing their sales and use tax returns. This bill required CDTFA to calculate ¾ of 1% of those gross receipts and report that amount to DOF to be included in the Governor’s annual budget for allocation to CDFA to fund state-designated fairs.

SUPPORT

: (As of 4/14/23)

None received

OPPOSITION

: (As of 4/14/23)

None received

-- END --