Sales and use taxes: exemption: menstrual hygiene products.

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. Those laws provide various exemptions from those taxes, including, until July 1, 2023, an exemption for the sale of, or the storage, use, or other consumption of, menstrual hygiene products, defined as tampons, specified sanitary napkins, menstrual sponges, and menstrual cups. Existing law requires the Department of Finance, beginning on May 15, 2020, to estimate the total dollar amount of revenue that would have been credited to the Local Revenue Fund 2011 if not otherwise exempted under the sales and use tax exemption for menstrual hygiene products and requires the Controller to transfer that amount from the General Fund to the Local Revenue Fund 2011, a continuously appropriated fund, no later than June 30 of each fiscal year. This bill would establish a similar exemption for the sale of, or the storage, use, or other consumption of, menstrual hygiene products beginning July 1, 2023, and would define menstrual hygiene products to additionally include menstrual underwear. The bill would provide that the Department of Finance is required to calculate, and the Controller is required to transfer, the total dollar amount of revenue prior to January 1, 2024, that would have been credited to the Local Revenue Fund 2011 if not otherwise exempted under the sales and use tax with respect to menstrual hygiene products, as specified. 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 laws authorize districts, as specified, to impose transactions and use taxes in accordance with the Transactions and Use Tax Law, which generally conforms to the Sales and Use Tax Law. Amendments to the Sales and Use Tax Law are automatically incorporated into the local tax laws. Existing law requires the state to 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.