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HomeMy WebLinkAboutMINUTES - 01211997 - SD2 SD, 2 TO: BOARD OF SUPERVISORS SE L ,.�,. Contra FROM: PHIL BATCHELOR, COUNTY ADMINISTRATOR o ~� 's Costa County DATE: January 15, 1997 ------- SUBJECT: --KSUBJECT: LEGISLATION: AB 68 (V. Brown & Lempert) EXEMPTING THE SALE OF ANIMALS FROM THE SALES TAX SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATION: ADOPT a position in SUPPORT of AB 68 by Assemblywoman Valerie Brown and Assemblyman Ted Lempert, which would exempt from the sales tax the sale of animals by a city, county, or nonprofit animal welfare organization. BACKGROUND: Under current law, the County's Animal Services Department collects sales tax on the sale price of animals from the animal shelter: $10.00 for dogs and $5.00 for cats. Last year the Department's collected $27,500 from these sales, resulting in sales tax revenue of $2,277. The Department does not collect sales tax on other charges which are made at the time an animal is adopted, such as vaccinations, licensing and spay/neuter deposits. Apparently some animal service departmentsdo collect sales tax on the total price they charge the individual who is adopting the animal. The Pinole Animal Shelter is within the City of Pinole. Therefore, the County receives only 2.5% of the city's share of the sales tax, which is only a fraction of the total sales tax collected, the bulk of which goes to the State. The Martinez Animal Shelter is in the unincorporated area of the County. Therefore, the County retains the local share of the sales tax, which, however, is only a small fraction of the total sales tax collected. CONTINUED ON ATTACHMENT: YES SIGNATURE: y RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE >C_APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON January 21, 1997 APPROVED AS RECOMMENDED X OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE X UNANIMOUS(ABSENT ) AND CORRECT COPY OF AN ACTION TAKEN AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN. ATTESTED January 21, 1997 Contact: e183 HELOR,CLERK OF THE BOARD OF �� See Page 2 RS AND COUNTY A I RAT OTY l_ Assemblymembers Brown and Lempert are jointly authoring AB 68, which would exempt from the sales tax the sale of an animal. The Acting Animal Services Director is recommending that the Board of Supervisors support AB 68. He notes that supporting the bill will send a message to the public that the County is concerned with the issue of pet overpopulation and in increasing the number of animal adoptions. To the extent that not having to pay sales tax will assist in increasing the number of animal adoptions it is felt to be worth the very small revenue loss, which will not be more than $200 or $300 annually at most. In those counties which collect sales tax on the total bill, including vaccinations, licensing and spay/neutering, which can run to $60 or $70, the sales tax may be a more significant issue and not having to pay it may be more of an encouragement to adopt an animal. The fact is that the sales tax collected in Contra Costa County is $ .41 for cats and $ .83 for dogs. This office agrees that the policy advantages of increasing the adoption of animals far outweighs the slight revenue loss which the County would sustain if the measure were to pass. We are, therefore, joining with the Animal Services Department in recommending that the Board of Supervisors support AB 68. cc: County Administrator Auditor-Controller Acting Animal Services Director Les Spahnn Heim, Noack, Kelly & Spahnn 1121 L Street, Suite 100 Sacramento, CA 95814 Casey Sparks, Executive Director Urban Counties Caucus 1100 K Street, Suite 101 Sacramento, CA 95814 -2- CA AB 68 01/08/97 Page 2 California 1997-98 Regular Session 1997 CA AB 68 Introduced 961211 Brown ASSEMBLY BILL No. 68 INTRODUCED BY Assembly Members Brown and Lempert (Coauthor: Senator O'Connell) DECEMBER 11, 1996 An act to add Section 6358 . 7 to the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. LEGISLATIVE COUNSEL' S DIGEST AB 68, as introduced, Brown. Sales and use taxes : exemptions : animal shelter or nonprofit animal welfare organization: sale of animal . The Sales and Use Tax Law imposes a tax on the gross receipts from the sale in this state of, or the storage, use, or other consumption in this state of, tangible personal property. That law provides various exemptions from that tax. This bill would enact the Pet Adopt.i.on. Sales and. Use Tax Relief Act of 1997 which would exempt from state and local sales and use taxes. any animal when sold by a city, county, city and county, or other local government animal shelter or nonprofit animal welfare organization, as specified. Counties and cities are authorized to impose local sales and use taxes in conformity with state sales and use taxes . Exemptions from state sales and use taxes enacted by the Legislature are incorporated into the local taxes. Section 2230 of the Revenue and Taxation Code provides that the state will reimburse counties and cities for revenue losses caused by the enactment of sales and use tax exemptions . This bill would provide that, notwithstanding Section 2230 of the Revenue and Taxation Code, no appropriation is made and the state shall not reimburse local agencies for sales and use tax revenues lost by them pursuant to this bill . This bill would take effect immediately as a tax levy, but its operative date would depend on its effective date. Vote: majority. Appropriation: no. Fiscal committee: yes . State-mandated local program: yes . THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS : SECTION 1 . This act shall be known as the Pet Adoption Sales and SD, a-- CA AB 68 01/08/97 Page 3 Use Tax Relief Act of 1997 . SEC. 2 . Section 6358 .7 is added to the Revenue and Taxation Code, to read: 6358 .7 . (a) There are exempted from the taxes imposed by this part, the gross receipts from the sale in this state of, and the storage, use, or other consumption in this state of, any animal when sold by a city, county, city and county, or other local government animal shelter or nonprofit animal welfare organization. (b) For purposes of this section, "nonprofit animal welfare organization" means an organization that is formed and operated for the primary purpose of prevention of abuse, neglect, or exploitation of animals, and is exempt from taxation under Section 23701d. (c) The exemption provided by this section shall include any charge made by the local government animal shelter or nonprofit animal welfare organization in connection with the spaying or neutering or future spaying or neutering of the animal , vaccinations or future vaccinations, or similar service as a prerequisite to the sale of the animal . SEC. 3 . Notwithstanding Section 2230 of the Revenue and Taxation Code, no appropriation is made by this act and the state shall not reimburse any local agency for any sales and use tax revenues lost by it under this act. SEC. 4 . This act provides for a tax levy within the meaning of Article IV of the Constitution and shall go into immediate effect. However, the provisions of this act shall become operative on the first day of the first calendar quarter commencing more than 90 days after the effective date of this act. END OF REPORT JAN-08-1997 14:25 CCC ANIMAL SERVICES 510 646 2991 P.02 Animial Services DepartmentDiane 1wasa Contra Animal Senjc�*Exreatw 4M Imhoff Place Martinez,Qklibmia 945x3-4393 Costa (510)646-2995 County 657 Pinole Shores Drive Pinole,Calftmia W64-2632 (510)374-3966 To: C. L. Van Marter, Assistant County Adrninj'straNlr Frown: Michael G. Ross,Acting Director A. Date: January 8, 1997 Subject: A. B,Bill 69 Brown (Animal Adoption Sales Tax) The above referenced Assembly Bill provides for the elimination of Wes tax on the adoption of animals from government operated animal shelters, The Bill does not provide for reimbursement of local govemment agencies for lost revenue as a result of the adoption of this legislation. Our Department currently collects sales tax on the sale price of the animal, i.e., $10.00 for dogs and $5.00 for cats. Last year our revenue,from these sales was$21,500 and we collmted$2,277 in sales tax. Attached is an editorial that aplpezred in the January 6, 1997, edition of the,Times. We have also received several phone calls from citizens in support of this legislation. I recommend that the County support this legislation because our support sends a message to the public that the County is concerned with the issue of pet overpopulation and in increasing the number of animal adoptions. Our opposition to the proposed legislation could have some negative political impact for the Board. The Times editorial is inaccurate in that they assumed that sales tax is charged on the entire adoption amount including vaccination, licensing and spay neuter deposits. Therefore, I have included a,draft response to the Times editorial. I would appreciate your comments regarding whether we should respond and if the proposed response is appropriately worded. Please let me know if you have any questions regarding the above. cc: D- 1wasa,files; JAN-08-1997 14:26 OCC ASI I MAL SERI)I CES 510 646 2991 P.03 fft sales' tax from pound adoptions bout 850,000 dogs and cats will others don't. enter animal shelters in Cali- For temple, Contra Costa County ' fc�rnia this year. Nearly two- does charge sales tax. It costs be- f :'thirds of them will be euthanized. tween $48 and $72 to adopt an ani- A bill introduced last month in the mal, depending on whether it's a dog : California Assembly aims to improve or cat and whether it's a male or fe- . the chances of some more of those male animal. So the sales tax would � animals finding domes by reducing be a few dollars and could legiti- the cost of adoption. mately make the difference for some v Assemblywoman Valerie Brawn, D- low-income families. � Kenwood, mad Board of Equalization Brown's bill would stipulate a clear Chairman Johan Mehs introduced a and consistent statewide policy on bill last month that would exempt taxation of pet adoptions from gov- ; from state and local sales taxes the ernment and nonprofits. fees and related costs incurred when Klebs, estimates the revenue Ioss at people adapt pets from shelters. $900,000 annually. But he rightly t The fees are usually imposed for notes that is a small tradeoff for the services like spaying or neutering and potential benefit of providing more vaccinations, Yet the policy is incon- families lovable pets and the dis- ;. sistent, Some cities and counties graceful practice of killing so many 1 charge sales tax for adoptions and animals. *MF4M1F 77 S i