Sales and use tax exemption: vehicle license fee imposition: motor vehicles.
Vote required
Two Thirds
Fiscal committee
No
Appropriation
No
Current location
Appropriations
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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 temporarily exempts the sale of used and new motor vehicles from California’s sales and use tax, with certain exceptions. Specifically, the exemption applies to sales by designated dealers and lasts until July 1, 2032. However, this exemption does not apply to local sales and use taxes or taxes deposited into the Local Revenue Fund 2011. Additionally, a new license fee of 3.9375% of the vehicle's gross receipts will be applied to these sales, and the collected fees will be deposited into the General Fund.
Key provisions
- Exempts sales of used and new motor vehicles from state sales and use tax between January 1, 2027, and July 1, 2032.
- The exemption applies to sales by specific dealers or their affiliates.
- A new license fee of 3.9375% of the vehicle’s gross receipts will be imposed on qualifying sales.
- Dealers must collect and remit the new license fee to the Department of Motor Vehicles.
- Collected fees will be deposited into the General Fund.
- The exemption does not apply to local sales and use taxes.
- The exemption does not apply to taxes deposited into the Local Revenue Fund 2011.
- The bill requires a 2/3 vote of each chamber of the legislature for passage.
Who is affected
- Motor vehicle dealers
- Consumers purchasing motor vehicles
- California State Government
- Local governments (cities, counties, and districts)
- Taxpayers
Bill text
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