The Use Fuel Tax Law imposes a state excise tax at specified rates, generally $0.18 per gallon, on the use of fuel, as defined, and establishes various exemptions from those taxes, including an exemption for any transit district, transit authority, or city owning and operating a local transit system, as provided. This bill would additionally apply this exemption to a county that owns and operates a local transit system, as provided. The California Constitution provides for the establishment of the State Board of Equalization, which, before July 1, 2017, had primary responsibility for most of the state's duties, powers, and responsibilities regarding the administration of taxes and fees. Existing law, on July 1, 2017, transferred to the California Department of Tax and Fee Administration various duties, powers, and responsibilities of the State Board of Equalization, including administration of the Use Fuel Tax Law, as specified. This bill would change references in the Use Fuel Tax Law provisions described above from the "State Board of Equalization" to the "California Department of Tax and Fee Administration" to reflect the transfer of the board's duties, powers, and responsibilities to the department. The Diesel Fuel Tax Law imposes taxes at a specified rate with respect to the distribution or delivery of each gallon of diesel fuel, and establishes various exemptions from those taxes, including an exemption for an exempt bus operation that consists of, among other things, a transit district, transit authority, or city owning and operating a local transit system, as provided. This bill would additionally apply this exemption to a county that owns and operates a local transit system, as provided. This bill would take effect immediately as a tax levy, but its operative date would depend on its effective date.
Existing law, the Personal Income Tax Law and the Corporation Tax Law, in conformity with federal income tax law, generally defines "gross income" as income from whatever source derived, except as specifically excluded, and provides various exclusions from gross income. Existing federal law authorizes an applicable entity, as defined, to receive a refund for specified environmental credits against the taxes imposed under federal law and excludes a refund payment made pursuant to that law from gross income. Existing federal law also authorizes an eligible taxpayer, as defined, to transfer the value of that refundable credit and exempts from gross income payment received by the transferor as consideration for the transfer. Existing federal law prohibits the transferee from deducting the amount paid as consideration for the transfer. This bill, in conformity with federal law, for taxable years beginning on or after January 1, 2026, and before January 1, 2031, would exclude from gross income a refund payment made for the specified federal environmental credits described above and any payment received by a transferor as consideration for a transfer, as provided. The bill would also prohibit a transferee from deducting the amount paid as consideration for the transfer, in conformity with federal law. Existing law requires a bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives the tax expenditure will achieve, detailed performance indicators, and data collection requirements. This bill would include additional information required for any bill authorizing a new tax expenditure. This bill would take effect immediately as a tax levy.
