Starting on January 1, 2013, California retailers or purchasers of lumber (such as home builders) will be required to charge consumers a 1% tax on solid wood products, but not on furniture, paper, and other wood-based products that have had a lot of manufacturing applied to them before sale. The tax will not be charged when trees are harvested or at the border when they come in to California, but when they are sold as retail products inside the state. Here is a clip of a legislative analysis of the bill.
II. AUTHORITY AND REFERENCE Assembly Bill Number 1492 (hereafter “AB 1492”) was developed by a budget subcommittee during the 2012 Legislative Session. Among the provisions in the bill is the creation of a new retail sale assessment of 1% of the sales price for lumber products sold in California. The revenue generated from the assessment will be placed in the newly authorized “Timber Regulation and Forest Restoration Fund” created in the State Treasury. Monies deposited into the fund are to be expended in support of the regulatory activities of the Department of Forestry and Fire Protection, and other state and local agencies involved in the management of forest lands. The Fund will also be utilized to cover the costs of managing forest resource programs in the state, and for grants to state and local public agencies, qualified nonprofit organizations, and recognized Indian tribes. The grants are intended to fund fire protection and suppression, and restoration activities on timberland.