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 of, 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 California Emergency Services Act authorizes the Governor to proclaim a state of emergency in an area affected, or likely to be affected, thereby if certain criteria are met, including there are conditions of disaster or of extreme peril to the safety of persons and property within the state caused by conditions such as air pollution, fire, flood, storm, epidemic, riot, drought, cyberterrorism, sudden and severe energy shortage, electromagnetic pulse attack, or plant or animal infestation or disease.

The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws.

This bill would allow, for a taxable year beginning on or after January 1, 2027, and before January 1, 2032, a credit against those taxes to a taxpayer in an amount equal to the amount of tax reimbursement paid by the taxpayer, or by a nonprofit housing developer working on behalf of the taxpayer, during a covered period, as defined, for sales tax on gross receipts from the purchase of certain qualified tangible personal property related to rebuilding the taxpayer’s primary residence from damage caused by a natural disaster, as defined. The bill would also allow a similar credit in an amount equal to the amount of use tax paid by the taxpayer during the covered period.

This bill would take effect immediately as a tax levy.