Sales and Use Tax Law: vehicles: shell companies.

Procedural formatting changes only: removal of Senate amendment dates and coauthor line, addition of enrolled bill header, passage dates for both chambers, and the Governor's signature/approval block at the end. No changes to any statutory language.

The entire amendment to Section 324.8 of the Public Utilities Code was removed. That provision required the PUC to make available on its website audits of its contracting practices conducted by the Department of General Services. The bill no longer touches the Public Utilities Code.

Senator Grayson is added as a co-author alongside Senator McNerney.

Multiple technical corrections: 'State' changed to lowercase 'state,' 'his' changed to 'their,' references to 'the board' updated to 'the department' or 'California Department of Tax and Fee Administration,' and line/page numbering adjusted throughout.

The fiscal committee and state-mandated local program designations changed from 'no yes' to 'yes,' reflecting the removal of the nonsubstantive PUC provision and leaving only the tax-related provisions that impose a state-mandated local program.

Defines 'shell company' as a closely held corporation, partnership, limited partnership, limited liability partnership, or LLC used to evade tax payment. Lists evidence including lack of business purpose, no physical location outside California, no W-2 employees, and failure to file tax returns.

A shell company is deemed a California resident if ANY shareholder, partner, member, or beneficial owner is a California resident - a far lower threshold than the existing 50% ownership rule for regular closely held entities.

Expands the entity types subject to the 50% residency test to include partnerships, limited partnerships, and limited liability partnerships (previously only closely held corporations and LLCs were covered).

New Section 6829.5 makes any officer, manager, partner, beneficial owner, or member of a shell company personally liable for unpaid taxes, interest, and penalties on vehicle, vessel, or aircraft purchases. The department must establish the property was used in California within 12 months and tax was not paid.

Three-year statute of limitations for serving a notice of deficiency, running from when the department obtains actual knowledge through audit or compliance activities that the shell company used the property in California.

Grandfather clause: the new shell company provisions do not apply to vehicles, vessels, or aircraft purchased or under a binding purchase contract before the operative date of the amendment.

Adds an exemption for vessels and aircraft brought into California exclusively for repair, retrofit, or modification at properly licensed facilities, and a 30-day exemption for vehicles brought in solely for warranty or repair service.

The bill's scope expanded from a single nonsubstantive change to Public Utilities Code Section 324.8 (changing 'Internet Web site' to 'internet website') to a multi-section tax enforcement measure amending Sections 6247 and 6248 of the Revenue and Taxation Code and adding new Section 6829.5.

Vote requirement changed from simple majority to two-thirds of each house because the bill results in taxpayers paying a higher tax under Article XIIIA of the California Constitution. The bill takes effect immediately as a tax levy.