AB 1189

Under current law, the state imposes a sales tax on all retailers at the rate of

5 percent of the sales price from the sale, lease, or rental of tangible personal property

and the sale of taxable services. In addition, the state imposes a use tax on all

consumers, at the rate of 5 percent of the purchase price, for the consumption, use,

or storage of goods in this state that the consumer purchases from an out-of-state

retailer or purchasers without paying the appropriate sales tax and the consumption

or use of taxable services in this state that the consumer purchases from an

out-of-state retailer or purchases without paying the appropriate sales tax.

This bill excludes from the definitions of “sales price” and “purchase price,” for

purposes of imposing the sales and use tax, any addition to the sale of tangible

personal property, including any addition charged to the customer that represents

or is in lieu of a tip or gratuity.

Because this bill relates to an exemption from state or local taxes, it may be

referred to the Joint Survey Committee on Tax Exemptions for a report to be printed

as an appendix to the bill.