Sales and Use Tax Law: exemptions: COVID-19 prevention and response goods.
Impact
The bill impacts the existing Revenue and Taxation Code, indicating that while counties and cities typically receive state reimbursements for revenue losses due to tax exemptions, AB 1702 explicitly states that no such appropriations will be made for lost revenues from these sales tax exemptions. This move signals a significant change in how local agencies may be affected financially as they will not receive compensation for their loss in revenue due to this new exemption.
Summary
Assembly Bill 1702, introduced by Assembly Member Levine, aims to provide a sales and use tax exemption for certain COVID-19 prevention and response goods, including high-quality face masks and at-home COVID-19 test kits. This exemption is set to remain in effect until January 1, 2025, effectively alleviating some financial burden for Californians purchasing necessary items to combat the COVID-19 pandemic. The bill specifies that it will not only exempt the gross receipts from the sales of these items but also their storage, use, or consumption within the state.
Sentiment
The sentiment surrounding AB 1702 appears to be largely supportive, with backing from several coauthors and acknowledgment of the necessity to provide financial relief during an ongoing public health crisis. By expediting this exemption under urgency legislation, the bill aims to address immediate public health needs while simultaneously supporting the state’s population as it navigates through the heavy fiscal implications of the pandemic.
Contention
Noteworthy points of contention include concerns raised about the financial implications for local governments, whose revenue may suffer without state reimbursements. There is ongoing debate regarding the potential impact of such tax exemptions on local budgets and whether sufficient measures are in place to assist those agencies that may experience heightened fiscal pressures as a result of the legislation.