Job Killer Bills Imposing Targeted Taxes Pass Policy Committees

Three California Chamber of Commerce-opposed job killer bills that seek to impose unfair targeted taxes passed Assembly policy committees this week.

Sweetened Beverages Tax

AB 138 (Bloom; D-Santa Monica) unfairly imposes a targeted excise tax on distributors of sweetened caloric beverages to fund health-related programs for all which will force distributors to reduce costs through higher prices to consumers or limit their workforce.

Given that the intended effect of AB 138 is to deter consumers from purchasing such beverages or concentrates, the bill will have a direct impact on the beverage industry and its employees.

The CalChamber believes any tax increase should be broad-based so that financial impacts are mitigated. One category of taxpayers should not be burdened with the financial responsibility of improving the health of all Californians.

Key Vote

AB 138 passed the Assembly Health Committee on April 9, 8-5.

Ayes: Aguiar-Curry (D-Winters), Bonta (D-Oakland), Burke (D-Inglewood), Limón (D-Santa Barbara), McCarty (D-Sacramento), Nazarian (D-Van Nuys), Wicks (D-Oakland), Wood (D-Santa Rosa).

Noes: Flora (R-Ripon), Ramos (D-Highland), Rodriguez (D-Pomona), Santiago (D-Los Angeles), Waldron (R-Escondido).

No Vote Recorded: Bigelow (R-O’Neals), Mayes (R-Yucca Valley).

Tax on Tire Purchases

AB 755 (Holden; D-Pasadena) imposes a $1.50 targeted tax on the purchase of new tires, that will unfairly raise prices on California residents, including employers, in order to fund the mitigation of zinc in storm water for all.

Californians are highly taxed, paying among the highest sales and use tax and personal income tax rates in the nation. This targeted tax will result in higher prices for consumers, who already pay a $1.75 tax on their tires to fund California’s tire recycling programs.

California just increased the gas tax, and California motorists pay more for gas than anywhere else in the country—about $15 billion per year in additional costs. AB 755 will only contribute to the overall costs of living in this very expensive state.

Key Vote

AB 755 passed the Assembly Environmental Safety and Toxic Materials Committee on April 9 on a party-line vote, 6-3.

Ayes: Bauer-Kahan (D-Orinda), C. Garcia (D-Bell Gardens), Holden (D-Pasadena), Kalra (D-San Jose), Muratsuchi (D-Torrance), Quirk (D-Hayward).

Noes: Dahle (R-Bieber), Mathis (R-Visalia), Melendez (R-Lake Elsinore).

Tax on Opioids

AB 1468 (McCarty; D-Sacramento/Gallagher; R-Yuba City) unfairly imposes an excise tax on opioid distributors in California, which will increase their costs and force them to adopt measures that include reducing workforce and increasing drug prices for ill patients who need these medications the most, in order to fund drug prevention and rehabilitation programs that will benefit all of California.

The bill will impose a $100 million excise tax on manufacturers and wholesalers that distribute or sell opioid medications in California. Each manufacturer and wholesaler would be required to report to the California Department of Public Health all opioid medication sold or distributed during a given fiscal year.

Based on the reported information, the department would then calculate the manufacturer’s or distributor’s ratable share, which is the individual portion of the collective sum of $100 million they will be required to pay that year.

While the CalChamber agrees that opioid abuse is a significant problem, any tax increase should be broad-based and shared by all so that the financial burden is mitigated.

Key Vote

AB 1468 passed the Assembly Health Committee on April 9, 8-5.

Ayes: Bonta (D-Oakland), Burke (D-Inglewood), Limón (D-Santa Barbara), McCarty (D-Sacramento), Nazarian (D-Van Nuys), Santiago (D-Los Angeles), Wicks (D-Oakland), Wood (D-Santa Rosa).

Noes: Bigelow (R-O’Neals), Flora (R-Ripon), Mayes (R-Yucca Valley), Ramos (D-Highland), Waldron (R-Escondido).

No Vote Recorded: Aguiar-Curry (D-Winters), Rodriguez (D-Pomona).

Staff Contacts: Sarah Boot, Valerie Nera

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Sarah Boot
Sarah R. Boot joined the CalChamber in March 2018 as a policy advocate specializing in privacy/technology, telecommunications, economic development, and taxation issues. Before joining CalChamber, Boot was a top adviser to now-Senate President Pro Tem Toni G. Atkins, serving as the senator’s legislative director and as lead staffer on legal, privacy, telecommunications, business, and technology issues, among many others. Boot also was principal consultant to Atkins during her time as Assembly Speaker and Speaker Emeritus. For three years, Boot was an assistant U.S. attorney in the Southern District of California. She prosecuted a broad array of federal crimes, including bank robbery, sex trafficking of minors, and narcotics trafficking. In private practice, Boot spent three years litigating complex civil and intellectual property litigation, primarily representing Internet and technology companies. Boot earned her J.D. from the University of Michigan Law School. She graduated from the University of Michigan with an honors degree in political science and a minor in Spanish