AB 398 suspends fire prevention fee, expands sales and use tax exemption
AB 398 (Ch. 17-135) suspends the fire prevention fee effective July 1, 2017, through December 31, 2030. (Pub. Res. Code §4213.05) Effective January 1, 2031, the fee is repealed. (Pub. Res. Code §4229) There is no word as yet whether and/or how fees that were paid for the 2017-18 fiscal year will be refunded.
AB 398 also expands the partial sales and use tax exemption for qualified property purchased by manufacturers and those in qualified research and development so that tangible personal property that is currently expensed under California law, including IRC §179 property, is eligible for the exemption. (R&TC §6377.1) Previously, only property that had a useful life of at least one year under state income tax law was eligible for the exemption. The exemption applies only to the state portion of sales and use taxes, currently set at 3.94%.