CA AB2518

Creates a sales and use tax exemption for building and construction supplies, materials, equipment, and machinery purchased by nonprofit 501(c)(3) corporations with a welfare exemption for constructing or rehabilitating properties sold to low-income persons and families, effective until January 1, 2020.

Exemption does not apply to local sales and use taxes, transactions and use taxes, or state taxes deposited into the Local Revenue Fund, Local Revenue Fund 2011, Local Public Safety Fund, or Education Protection Account.

Purchaser becomes liable for sales tax if exempted items are removed from California, converted to non-qualifying use, or used in a manner not qualifying for the exemption within one year of purchase, with tax calculated based on the cost to the purchaser.

State shall not reimburse local agencies for sales and use tax revenue losses resulting from this exemption, notwithstanding existing reimbursement requirements under Revenue and Taxation Code Section 2230.

Bill takes effect immediately as a tax levy, with operative date beginning the first calendar quarter more than 180 days after enactment.