SB 696 California Senate · 2025-2026 Regular Session

Sales and Use Tax Law: exemptions: firefighting equipment.

Summary

Existing state 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. The Sales and Use Tax Law provides various exemptions from those taxes. This bill, on and after July 1, 2026, and before January 1, 2031, would exempt from those taxes the gross receipts from the sale in this state of, and the storage, use, or other consumption in this state of, firefighting apparatus, equipment, or specialized vehicles, as defined, purchased by a fire department, including an all-volunteer fire department, as defined, or a fire protection district. Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals that the tax expenditure will achieve, detailed performance indicators, and data collection requirements. This bill also would include additional information required for any bill authorizing a new tax expenditure. 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. This bill would provide that the exemption created by the bill does not apply to local sales and use taxes or transactions and use taxes. Existing law imposes or dedicates certain state sales and use tax rates for local funding, including through the Local Revenue Fund 2011. This bill would provide that the exemption created by the bill does not apply to those state sales and use tax rates imposed or dedicated for local government funding, including those rates for which revenues are deposited into the Local Revenue Fund 2011. This bill would take effect immediately as a tax levy.

Issues: ✓ Budget & Taxes

Bill status failed 1 of 4 stages cleared

Introduction

Feb 2025

Committee Review

Floor Vote

Governor

Introduced Feb 21, 2025 Last action Feb 2, 2026

Maddy AI version diff · 3 comparisons

What changed between versions

05/06/25 - Amended Senate → 05/08/25 - Amended Senate · 5 edits · May 8, 2025

MODERATE

The May 8 amendment makes three substantive changes to SB 696: it delays the effective date from January 1, 2026 to July 1, 2026; it removes the provision stating the state would not reimburse local agencies for lost tax revenue (previously Section 2); and it appears to exclude the Department of Forestry and Fire Protection (CalFire) from the definition of eligible 'fire department,' narrowing who can claim the sales tax exemption on firefighting equipment. The first annual report deadline was also pushed from April 1, 2027 to April 1, 2028.

TIMELINE

The effective date of the sales tax exemption was delayed by six months, from January 1, 2026 to July 1, 2026.

The first required performance report deadline was changed from April 1, 2027 to April 1, 2028, giving the Department of Tax and Fee Administration an additional year before its first reporting obligation.

FISCAL

The provision stating that no state appropriation is made and the state shall not reimburse local agencies for lost sales and use tax revenue (former Section 2) was deleted entirely. This removes an explicit waiver of the state's usual obligation to reimburse localities for revenue lost due to state-level tax exemptions.

ELIGIBILITY

The definition of 'fire department' appears to have been restructured to exclude the Department of Forestry and Fire Protection (CalFire) from eligibility. Previously CalFire was explicitly listed as an included entity; the amended text adds it to the exclusion list alongside educational institution fire departments. The drafting in this section is garbled but the intent is to remove CalFire from the exemption.

DEFINITION

The main exemption language was changed from 'purchased for use by a fire department' to 'purchased by a fire department,' removing the 'for use' qualifier in a minor clarifying edit.

02/21/25 - Introduced → 05/06/25 - Amended Senate · 8 edits · May 6, 2025

MODERATE

The amended version of SB 696 adds detailed definitions for covered equipment and eligible fire departments, delays the effective date by six months from January to July 2026, explicitly excludes local sales and use taxes and state tax rates dedicated to local funding (including the Local Revenue Fund 2011) from the exemption, and requires purchasers to provide an exemption certificate to retailers. These changes narrow the scope of the tax break while making it more administratively workable.

TIMELINE

The effective date of the sales tax exemption was moved from January 1, 2026 to July 1, 2026, giving a six-month delay before the exemption takes effect.

The first annual performance report deadline was changed from April 1, 2027 to April 1, 2028, consistent with the later effective date.

DEFINITION

A new definitions subsection was added specifying that 'firefighting apparatus, equipment, or specialized vehicles' includes electronic and communication equipment (radios, phones, laptops, computers), specialized vehicles (command staff vehicles, boats, swift water rafts, ladder trucks, fire engines, trailers), personal protective equipment (SCBA, safety boots, turnouts), vehicle-mounted equipment (hoses, axes, defibrillators, medical supplies, rope rescue gear, auto extrication tools, chainsaws, ventilation fans, wildland firefighting tools, portable water tanks and pumps, thermal imaging cameras), and maintenance tools/parts/supplies.

A new definition of 'fire department' was added covering city, county, district, or other public fire departments, the Department of Forestry and Fire Protection, and county forestry or firefighting units. It explicitly excludes fire departments of the University of California, California State University, or any other educational institution.

The term 'fire district' was changed to 'fire protection district' in the operative text.

SCOPE

The exemption now explicitly does not apply to local sales and use taxes imposed under the Bradley-Burns Uniform Local Sales and Use Tax Law or the Transactions and Use Tax Law, meaning counties, cities, and districts can still tax these purchases at the local level.

The exemption also does not apply to state sales and use tax rates that are imposed or dedicated for local government funding, including rates whose revenues are deposited into the Local Revenue Fund 2011. This means the exemption only applies to the base state rate, not to portions of the state rate earmarked for local governments.

REQUIREMENT

A new requirement was added that purchasers must furnish retailers with a completed exemption certificate (per department instructions or regulations) and the retailer must retain it in its records and provide it to the department upon request.

Floor votes

How they voted

No floor votes recorded yet.

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Amendments

May 23, 2025

Upper · Passed

May 23 hearing: Held in committee and under submission.

upper

May 14, 2025

Upper · Passed

From committee: Do pass and re-refer to Com. on APPR. (Ayes 5. Noes 0. Page 1083.) (May 14). Re-referred to Com. on APPR.

upper

May 8, 2025

Upper · Passed

From committee with author's amendments. Read second time and amended. Re-referred to Com. on REV. & TAX.

upper

May 6, 2025

Upper · Passed

From committee with author's amendments. Read second time and amended. Re-referred to Com. on REV. & TAX.

upper

Mar 5, 2025

Committee

Referred to Com. on REV. & TAX.

upper

Feb 21, 2025

Introduced

Introduced. To Com. on RLS. for assignment. To print.

upper

1 primary · 0 co-sponsors