Sales and use taxes: exemptions: animals: drugs and medicines.

Existing sales and use tax laws impose a tax on retailers measured by the gross receipts from the sale of tangible personal property sold at retail in this state, or on the storage, use, or other consumption in this state of tangible personal property purchased from a retailer for storage, use, or other consumption in this state, and provides various exemptions from those taxes. Existing sales and use tax laws, with certain exceptions, define a retailer as a seller who makes any retail sale of tangible personal property and as a person who makes more than 2 retail sales of tangible personal property during any 12-month period, and defines a retail sale as a sale of tangible personal property for any purpose other than resale in the regular course of business. Existing sales and use tax law provides that a licensed veterinarian is a consumer of, and not a retailer of, drugs and medicines used or furnished by the veterinarian in the performance of his or her professional services, so that the retail sale subject to tax is the sale of drugs and medicines to the licensed veterinarian. This bill would, until January 1, 2018, suspend the provision that a licensed veterinarian is a consumer of drugs and medicines used or furnished by the veterinarian in the performance of his or her professional services. This bill would, until January 1, 2018, exempt from sales and use taxes the gross receipts from the sale in this state of, and the storage, use, or other consumption in this state of, drugs and medicines used, furnished, or sold by a licensed veterinarian, a city, county, city and county, or other local government animal shelter, or a nonprofit animal welfare or rescue organization for the treatment of animals. This bill would require the Legislative Analyst's Office to, by January 1, 2017, with information provided by the State Board of Equalization, conduct and submit a study to the Senate Committee on Budget and Fiscal Review, the Assembly Committee on Budget, the Assembly Committee on Revenue and Taxation, and the Senate Committee on Governance and Finance. The Bradley-Burns Uniform Local Sales and Use Tax Law authorizes counties and cities to impose local sales and use taxes in conformity with the Sales and Use Tax Law, and existing law authorizes districts, as specified, to impose transactions and use taxes in accordance with the Transactions and Use Tax Law, which conforms to the Sales and Use Tax Law. Amendments to state sales and use taxes are incorporated into these laws. 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 any 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.