Sales and Use Tax Law: vehicles: shell companies.
Vote required
Two Thirds
Fiscal committee
No
Appropriation
No
Current location
Passed
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Progress
Where this bill stands in the legislative process.
- Introduced
- Passed Senate
- Passed Assembly
- To Governor
- Became Law
Overview
This bill modifies California’s sales and use tax laws regarding vehicles to address the use of shell companies for tax evasion. It establishes a presumption that a vehicle brought into California within 12 months of purchase by a resident or a shell company is considered used or stored in the state and subject to use tax. Individuals associated with shell companies, such as officers, managers, or beneficial owners, will be held personally liable for unpaid taxes, and the bill includes conforming changes to existing statutes.
Key provisions
- Establishes a presumption that vehicles brought into California within 12 months of purchase are subject to use tax.
- Defines a ‘shell company’ as a closely held corporation, partnership, or limited liability company used to evade taxes.
- Holds officers, managers, partners, beneficial owners, and members of shell companies personally liable for unpaid taxes.
- Provides a rebuttable presumption that a vehicle purchased outside California by a resident is used or stored in California.
- Allows for the controversion of the presumption with documentary evidence.
- Includes conforming changes to existing state statutes.
- Specifies that the bill creates a state-mandated local program.
- Provides for an immediate effective date.
Who is affected
- Retailers of vehicles
- California residents purchasing vehicles
- Shell companies
Bill text
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