California’s Keep Groceries Affordable Act Prohibits New Local Taxes or Fees on Groceries

The Keep Groceries Affordable Act of 2018 prohibits any new local California sales or use tax, fee, or other assessment on groceries.

Application of Prohibition

The prohibition applies to the imposition, increase, levy, collection, or enforcement of such a local:

– tax;

– fee; or

– assessment.

Local Taxes, Fees, or Assessments Imposed on Groceries Before January 1, 2018

Cities, counties, and local agencies may continue to levy and collect, enforce, or reauthorize any tax, fee, or other assessment on groceries imposed, extended, or increased on or before January 1, 2018.

Moreover, the act does not prohibit the imposition, extension, increase, levy and collection, or enforcement of any generally applicable tax, fee, or other assessment, including:

– taxes levied under the Bradley-Burns Uniform Local Sales and Use Tax Law; or

– the Transactions and Use (District) Tax Law.

Consequences of Local Action Taken in Conflict with Act

If a local agency acts in conflict with the act, the California Department of Tax and Fee Administration (CDTFA) will terminate its contract to administer any local sales or use tax ordinance. This action will be taken under the Bradley-Burns Uniform Local Sales and Use Tax Law.

Any civil court action that arises from this law:

– will be given priority over other actions; and

– the venue will be Sacramento County.

Local Taxes, Fees, or Assessments Imposed on Groceries After January 1, 2018

Any new taxes, fees, or assessments on groceries imposed by a local agency after January 1, 2018:

– are inoperative as of June 28, 2018, and

– cease to be imposed, levied, collected, and enforced as of that date.

Definition of “Groceries”

“Groceries” are defined as any raw or processed food or beverage intended for human consumption, including the:

– packaging;

– wrapper;

– container; or

– any ingredient of such food or beverage.

Examples include:

– meat;

– poultry;

– fish;

– fruits;

– vegetables;

– grains;

– bread;

– milk;

– cheese and other dairy products; or

– any carbonated or noncarbonated nonalcoholic beverages.

Groceries do not include:

– alcoholic beverages;

– cannabis;

– cannabis products;

– cigarettes;

– tobacco products; and

– electronic cigarettes.

Definition of “Tax, Fee, or Other Assessment on Groceries”

“Tax, fee, or other assessment on groceries” includes:

– taxes;

– fees;

– surcharges;

– any similar levy, charge, or exaction of any kind on groceries; or

– the manufacture, supply, distribution, sale, acquisition, possession, ownership, transfer, transportation, delivery, use, or consumption of groceries.

Repeal Date

These provisions are repealed as of January 1, 2031.

Special Notice L-597, California Department of Tax and Fee Administration, January 2019

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AUTHOR

CCHTaxGroup

All stories by: CCHTaxGroup