Sales and use taxes: auction: vehicles.

The Sales and Use Tax Law presumes that all proceeds from retail sales are subject to tax until the contrary is established. The burden of proving a sale of tangible personal property is not a retail sale subject to tax is on the seller unless the seller takes a resale certificate in good faith from a person engaged in the business of selling tangible personal property who holds a permit under that law. Under that law, a person engaged in the business of making retail sales at auction of tangible personal property owned by others is a retailer. That law generally provides that retail sales of vehicles subject to registration under the Vehicle Code are subject to sales tax when sold by a person licensed or certificated under the Vehicle Code and subject to use tax, collected by the Department of Motor Vehicles, when sold by a person not so licensed or certificated. A vehicle not registered under the Vehicle Code, such as a salvage vehicle, is not subject to the special rules for registered vehicles. This bill would provide that a licensed dismantler that sells specified vehicles, motorhomes, or commercial coaches subject to registration or qualification under the Health and Safety Code or the Vehicle Code, and salvage certificate vehicles, or a person making those sales at auction, is presumed to be making a sale at retail, subject to tax and not a sale for resale. This bill would provide that the seller may rebut this presumption by taking a resale certificate that includes specified information from a licensed dealer, dismantler, automotive repair dealer, or scrap metal processor. This bill would allow a qualified person that does not timely obtain a resale certificate to use alternative methods, prescribed by the State Board of Equalization, to verify the transaction is a valid sale for resale. 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. 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. This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of 23 of the membership of each house of the Legislature. This bill would take effect immediately as a tax levy.