SB 1424: Sales and use taxes: zero-emission vehicle fueling or charging.

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 of, 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. The Sales and Use Tax Law provides various exemptions from those taxes, including a partial exemption for the sale of, or the storage, use, or consumption of, certain tangible personal property purchased for use by a qualified person to be used primarily in specified manufacturing, processing, refining, fabricating, recycling, research and development, or electric power, as prescribed. Existing law prohibits an exemption under that provision unless the purchaser furnishes the retailer with an exemption certificate, completed in accordance with any instructions or regulations as the department may prescribe, and the retailer retains the exemption certificate in its records and furnishes it to the department upon request. qualified tangible personal property purchased for use by a qualified person to be used primarily in any stage of the manufacturing, processing, refining, fabricating, or recycling of tangible personal property, beginning at the point any raw materials are received by the qualified person and introduced into the process and ending at the point at which the manufacturing, processing, refining, fabricating, or recycling has altered tangible personal property to its completed form, including packaging, if required.

Existing law (backfill requirement) requires an amount that equals the estimated revenue loss to the General Fund from the allowance of the above-described exemptions, with the concurrence of the Department of Finance, to be transferred from the Greenhouse Gas Reduction Fund to the General Fund, as prescribed.

This bill would additionally exempt, under the provision described above, from state sales and use tax laws qualified tangible personal property purchased for use by a qualified person to be used exclusively in the processing, altering, or other preparation required for converting or conditioning hydrogen or electricity for the fueling of a zero-emission vehicle, as specified. The bill would also exempt, under the provision described above, from state sales and use tax laws qualified tangible personal property purchased by a contractor for use in the performance of a construction contract for a qualified person who will use that property as an integral part of an activity listed above, as specified. would, beginning July 1, 2027, define processing to include the altering, converting, conditioning, or other preparation of hydrogen or electricity for the purposes of selling the hydrogen for fueling or the electricity for charging a vehicle and would define qualified tangible personal property to include hydrogen fueling station equipment and charging station equipment and component parts used as an integral part of those activities. By expanding the scope of the crime of perjury, this bill would impose a state-mandated local program.

This bill would provide that the backfill requirement does not apply to those additional exemptions. with respect to the exemptions allowed by the bill, as specified.

Existing law requires any bill authorizing a new tax expenditure 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 additional information required for any bill authorizing a new tax expenditure.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

This bill would take effect immediately as a tax levy.