Sales and Use Tax Law: exemption: over-the-counter medication.
Vote required
Majority
Fiscal committee
No
Appropriation
No
Current location
Revenue and Taxation
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Progress
Where this bill stands in the legislative process.
- Introduced
- Passed Assembly
- Passed Senate
- To Governor
- Became Law
Overview
This bill creates an exemption from California sales and use tax for over-the-counter medications, as defined by the Food and Drug Administration. The exemption applies to the gross receipts from sales and consumption of these medications within the state. However, this exemption does not extend to local sales and use taxes or taxes dedicated to local government funding, such as those deposited into the Local Revenue Fund 2011.
Key provisions
- Exempts over-the-counter medications from state sales and use tax.
- Defines ‘over-the-counter medication’ based on FDA regulations.
- The exemption does not apply to local sales and use taxes.
- The exemption does not apply to taxes dedicated to local government funding.
- Requires the Department of Finance to report on the number of transactions exempt and the total tax revenue forgone.
- Establishes performance indicators for evaluating the effectiveness of the tax exemption.
- The exemption will expire on January 1, 2032.
- Creates a new section (6369.3) in the Revenue and Taxation Code.
Who is affected
- Retailers of over-the-counter medications
- Consumers purchasing over-the-counter medications
- California state government
- Local governments (counties, cities, and districts)
- The Department of Finance
Notable changes
Bill text
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Sponsors
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1 on record
Primary sponsor
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