SB 1315

BUSINESS TAX Except for the f ees for the exercise of privileges of antique malls, flea markets, craft shows, antique shows, gun shows, auto shows and transient vendors , present law provides that the making of sales by engaging in any vocation, occupation, business, or business activit y is declared to be a privilege upon which a state tax is levied at the rates fixed and provided for depending on the business . Such tax levied by the state, including any associated interest and penalties, must be distributed in the following way:  An amount equal to $7 per return must be paid to the county clerk with respect to each tax return filed by a taxpayer that is either located within the county or otherwise obtains a license. Of that amount, $3 must be earmarked for computer hardware purchases or replacement . The amount must be preserved for these purposes and must not revert to the general fund at the end of a budget year if unexpended.  After such distribution , an amount equal to 5% of the remaining proceeds of the tax must be paid to the county clerk .  After the above distributions, 42.62% of the remaining proceeds of the tax must be earmarked and allocated specifically and exclusively to the state's general fund .  After the above distributions, an administration fee of 1.125% of the remaining proceeds of the tax must be allocated to the department of revenue ("department"" ) to cover the expenses of administration and collection .  After the above distributions, the remaining proceeds must be distributed to the county in which the taxpayer has established a physical location, outlet, or other place of business from which the sales are made. This bill changes the fourth distribution listed above from 1.125% to 0.75% to the department to co ver the expenses of administration and collection. Levied b y a n Incorporated Municipality Present law requires t he tax levied by an incorporated municipality, including any associated interest and penalties, to be distributed as follows:  An amount equal to $7 per return must be paid to the appropriate city official with respect to each tax return filed by a taxpayer that is either located within the municipality or otherwise obtains a license .  After such distribution, an amount equal to 5% of the remaining proceeds of the tax must be paid to the appropriate city official in the case of returns filed by taxpayers located or otherwise licensed within the municipality .  After the above distributions, 42.62% of the remaining proceeds of the tax must be allocated to the general fund of the state. Any allocation or distribution of amounts from the general fund for local purposes must be deemed first derived from the proceeds directed into the general fund .  After the above distributions, an administration fee of 1.125% of the remaining proceeds of the tax must be allocated to the department to cover the expenses of administration and collection .  After the above distributions, the remaining proceeds of the tax collected by the commissioner must be distributed to the municipality that levied the tax. This bill changes the fourth allocation listed above from 1.125% to 0 .75% to the department to cover the expenses of administration and collection. SHORT-TERM RENTAL UNIT MARKE TPLACE TAX Present law requires the department to distribute the taxes collected on a monthly basis to the applicable local governing body in which the short-term rental unit was located and for which the tax was collected. The department may deduct an administration fee of 1.125% of the collected tax to cover its expenses of administering the collection and distribution of the tax. This bill changes the authorized administrative deduction from 1.125% to 0 .75% . LOCAL TAX SURCHARGE A local government is authorized to levy a surcharge on the same privileges subject to certain other taxes if the underlying local tax on such privileges is being collected at the time a transit improvement program is adopted. Any surcharge must be a separate charge in addi tion to the local taxes and subject to certain maximums. For any surcharge that the department administers and collects, t he department must remit the proceeds of the surcharge to the local government levying the surcharge, less an administrative fee of 1 .125% to cover expenses of administering the collection and remittance of the surcharge . This bill lowers the administrative fee from 1.125% to 0 .75% . LOCAL OPTION REVENUE TAX Present law requires t he department to collect local option revenue tax concurrently with the collection of the state tax in the same manner as the state tax is collected . The department must remit the proceeds of the tax to the county, city or town levying the tax, less 1.125% to defray the state's expenses in administering, collecting, and remitting the local sales tax . This bill reduces the percentage from 1.125% to 0.75%. Reporting On or before January 1, 2023, and on or before January 1 of each subsequent year, present law requires the department to submit a report to the finance, ways and means committees of the senate and the house of representatives outlining the actual costs incurred by the department for the administration and collection of the local option sales tax. This bill removes this provision. COAL S EVERANCE TAX Present law provides that a ll revenues collected in a county in which coal products are severed, less an amount of 1.125% of the tax, which must be retained by the department and credited to its current service revenue to cover the expenses of administration and collection, must be remitted by the commissioner to that county in which the coal products were severed for the following specific purposes: half of all revenues collected must be used for the educational system of the county, and the remaining half must be used for highway and stream cleaning systems of the county. This bill reduces the percentage from 1.125% to 0.75%. EFFECTIVE DATE This bill applies to tax collections received on or after July 1, 2025 ."