JurisdictionCaliforniaCode RTCRevenue and Taxation Code - RTC
Div. 2.DIVISION 2. OTHER TAXES
Part 1.PART 1. SALES AND USE TAXES
Ch. 4.CHAPTER 4. Exemptions
Art. 1.ARTICLE 1. General Exemptions
(a)On and after January 1, 2019, and before January 1, 2025, there are exempted from the taxes imposed by this part the gross receipts from the sale of, and the storage, use, or other consumption in this state of, building materials and supplies purchased by a qualified person for use by that qualified person in the construction of a qualified facility.
(b)For the purposes of this section, the following definitions apply:
(1)
(A)“Building materials and supplies” includes any machinery, equipment, materials, accessories, appliances, contrivances, furniture, fixtures, and all technical equipment
or other tangible personal property of any other nature or description that meet all of the following:
(i)Are necessary to construct and equip a qualified facility.
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(a)
On and after January 1, 2019, and before January 1, 2025, there are exempted from the taxes imposed by this part the gross receipts from the sale of, and the storage, use, or other consumption in this state of, building materials and supplies purchased by a qualified person for use by that qualified person in the construction of a qualified facility.
(b)
For the purposes of this section, the following definitions apply:
(1)
(A)
“Building materials and supplies” includes any machinery, equipment, materials, accessories, appliances, contrivances, furniture, fixtures, and all technical equipment
or other tangible personal property of any other nature or description that meet all of the following:
(i)
Are necessary to construct and equip a qualified facility.
(ii)
Become part of the completed facility.
(iii)
Are transferred to the United States Department of Defense or the United States Department of Veterans Affairs as a gift described in paragraph (3).
(B)
“Building materials and supplies” shall not include any tools or construction equipment other than those specified in subparagraph (A) that a qualified person uses in construction activities, specifically including construction of a qualified facility.
(2)
“Qualified facility” means either of the following:
(A)
A medical facility, or a temporary residential facility for families of patients receiving care, including either or both inpatient and outpatient care, at a medical facility, located on a United States military base in California.
(B)
A United States Department of Veterans Affairs medical center, or a temporary residential facility for families of patients receiving care at or as part of a United States Department of Veterans Affairs medical center, located in California.
(3)
“Qualified nonprofit organization” means an organization exempt from taxation pursuant to Section 501(c)(3) of the Internal Revenue Code that constructs a qualified facility as a gift
to the United States Department of Defense pursuant to Section 2601 of Title 10 of the United States Code or the United States Department of Veterans Affairs pursuant to Section 8301 of Title 38 of the United States Code.
(4)
“Qualified person” means either or both of the following:
(A)
A qualified nonprofit organization.
(B)
A contractor, subcontractor, or builder working under contract with a qualified nonprofit organization to construct a qualified facility.
(c)
The exemption provided by this section shall only apply to sales and purchases that occur after the date the United States Department of Defense or the United States Department of Veterans
Affairs accepts the offer of the qualified nonprofit organization to construct the qualified facility and on or before the date the United States Department of Defense or the United States Department of Veterans Affairs accepts the qualified facility.
(d)
(1)
An exemption shall not be allowed under this section with respect to sales by, or purchases from, a retailer engaged in business in this state or from a retailer that is authorized by the California Department of Tax and Fee Administration, under the rules and regulations as it may prescribe, to collect the tax and that is, for the purposes of this part relating to the use tax, regarded as a retailer engaged in business in this state, unless the purchaser furnishes the retailer with an exemption certificate completed in accordance with any instructions or regulations as the
California Department of Tax and Fee Administration may prescribe and the retailer retains a copy of the exemption certificate in its records and furnishes the copy of the exemption certificate to the California Department of Tax and Fee Administration upon request.
(2)
If a purchaser furnishes the retailer with a copy of an exemption certificate pursuant to paragraph (1), but uses building materials and supplies purchased with the exemption certificate in a manner not qualifying for the exemption, the purchaser is liable for payment of sales tax, with applicable interest, as if the purchaser were a retailer making a retail sale of the building materials and supplies at the time the property is so used, and the cost of the building materials and supplies to the purchaser shall be deemed the gross receipts from that retail
sale.