Summary
SB 87 will enshrine a sales tax exemption for all-volunteer fire departments (AVFDs) income from fundraising activities, which is due to sunset on January 1, 2026.
Background
In California, a sales tax is imposed on every retailer who sells tangible goods. However, current law designates certain sellers as "consumers," meaning they are not required to obtain a seller's permit or collect and remit sales tax to the California Department of Tax and Fee Administration (CDTFA). This designation applies to several groups, including medical and veterinary professionals, nonprofits selling member-made goods, and, since 2015, AVFD’s that meet specific criteria.
In 2015, SB-598 (Hill) was Chaptered into law and designated AVFD’s as consumers under the Sales and Use Tax Law for their sales of tangible personal property, provided their profits are used solely to further the department's purposes. Before SB-598, California's 250 all-volunteer fire departments paid sales tax on fundraising activities like pancake breakfasts and T-shirt sales, which significantly reduced their ability to fund essential equipment and operations. For example, the La Honda All-Volunteer Fire Department relied on these fundraisers to purchase a $500,000 fire engine.
When SB-598 was set to expire, SB-38 (Hill) provided an extension through 2026. This sales tax exemption is vital to the life-saving operations of volunteer firefighters. Rather than continuing the cycle of temporary extensions, eliminating the repeal provision provides long-term stability for these community servants who rely on fundraising to maintain their life-saving operations.
Proposal
SB 87 will extend the sales tax exemption on fundraising activities for AVFD’s, while maintaining the qualifying requirement that departments' gross receipts must not exceed $100,000 in the preceding two calendar years.
Click here to read the bill language