New California Laws for 2012

Ringing in a new year means news laws, and this year, new California laws include:

• Perhaps most controversial, the Dream Act allows in-state tuition rates for qualifying illegal immigrants.
• Public schools must include lessons about historical achievements of gays/lesbians and the disabled
• Cough syrup and other products containing dextromethorphan, e.g., Robitissin DM and Nyquil, will now require a prescription for purchase by minors.
• Sale and distribution of shark fins is prohibited. This law targeted a Chinese delicacy, shark fin soup.
• Beer with caffeine is also outlawed.
• Parents must keep children in a car seat until the earlier of the age of eight, or the child reaches the height of four feet, nine inches.
• Crossing double white lines on the highway is now illegal.
• Open carry of unloaded firearms is now prohibited.
• Tanning bed use by those under the age of 18 is now prohibited.
• Internet retailers must collect California sales tax on transactions if the retailer has a presence in the state.
• Contractors are now allowed to do business with LLCs instead of only corporations

See also -

New California Employment Laws for 2012;
New Probate Laws for 2012;
Jery Brown Signs California Dream Act, Patrick McGreevy and Anthony York, Los Angeles Times, October 9, 2011;
Dream Act is a nightmare for California tax payers, Jose Gizzardi, Lodi News Sentinel, December 31, 2011;
CHP List of New Traffic Laws

SOPA Act Update

Opponents of the Stop Online Piracy Act (SOPA) are gaining momentum, reports paidContent.org:

Not long ago the controversial law known as the Stop Online Piracy Act was poised to sail through Congress. But it lost traction at a Congressional earlier hearing this month and this week it suffered an additional two setbacks.

The bill called SOPA is backed by Hollywood and would force a wide range of internet players—from search engines to ad networks to payment processors—to cut off services to so-called ‘rogue websites’ that sell fake goods. Journalists and tech companies responded by warning that the bill is a gross overreach and that it will result in censorship and technical damage to the internet.

See also How SOPA Would Affect You: FAQ, Declan McCullagh, CNet, December 21, 2011

Cross-posted at Nevada Business Law Blog.

Federal Internet Sales Tax Law Coming Soon?

The Washington Times reports that the era of sales-tax-free shopping on the Internet for residents of relatively high sales tax states like California may be coming to a close, as brick-and-mortar retailers pressure Congress to close the "loophole":

[Federal Internet sales tax] bills have come and gone for years [in the U.S. Congress], but the political winds took a turn this year, thanks largely to the efforts of lawmakers in California. The state waged a high-stakes duel with Amazon.com and won after the online giant agreed in September for the first time to comply with a state sales tax instead of fighting it in the courts or at the polls.

Amazon.com had vowed to spend tens of millions of dollars on a ballot referendum to overturn the law, which the state countered with a threat to pass the bill as an “urgency measure” that voters could not repeal. Amazon.com ultimately blinked and signed off on a deal in which remote sellers agree to pay the California sales tax after a one-year grace period unless Congress approves national rules.

The California move injected fresh enthusiasm into federal efforts to level the sales-tax playing field. Within weeks, the House and Senate had introduced bipartisan legislation giving states the option of collecting sales taxes from online sellers.

California law already requires businesses and individuals to report and pay use tax at the same rate as sales tax for goods purchased online or out of state and brought in and used in California. Enforcement and compliance on the personal side has been minimal, but the Board of Equalization, the state agency charged with administering the state's sales tax law, has required businesses grossing more than $100,000 per year to register and report and pay use tax on any such purchases since 2009.

See also California Governor signs sales tax law compromise

Things I'm working on...

There is a ton going on in the Birmingham startup ecosystem, some that is public knowledge and some that isn't.

Here's a small sampling of some at least semi public stuff that I've been working on and think is worth supporting...if anything seems like a fit, give me a buzz, we can always use good help.

1. Expanding our BAN Mentorship Program
2. Creating a Culinary Startup Incubator
3. Proposing and Passing a Startup Capital Tax Credit
4. Getting regularly scheduled PR for the Startup scene
5. Supporting and expanding Birmingham Startup Drinks
6. Creating a Deal Flow Clearinghouse for non-startup related alternative investments
7. Brainstorming on ways to fill the "concept validation" gap

That's probably a good start.

If any of that strikes your fancy...come on down.

***This post probably also shows that we could use an initiative that keeps track of the various ways to get involved, but that will have to wait till another day.

Statement of Information Filings with the Secretary State for California LLCs and Corporations

The California Secretary of State has recently changed its procedures such that -unlike other business entity filings - LLC and corporation Statements of Information filed over the counter will be processed on the same timeline and priority as those filed by mail. The current turnaround time for either filing option is approximately four months.

There are two workarounds, neither one without its own problems:

• Use 24-hour expedited filing, at a cost of an additional $350. Number one, this is too expensive to justify its use in most instances and, number two, if there is any mistake on the form, the Secretary of State's office will reject the filing but retain the $350 for its expedited review of the form.
  
  
• For corporations only, the Statement (Forms SI-100, SI-200 C, and SI-200 N/C) may be filed online. The online filing system, however, does not provide a file-stamped copy. And isn't available yet for LLC Statement of Information filings (Forms LLC-12 and LLC-12R). It is anticipated that in late 2011 or early 2012, corporations will be able to receive a filed copy of the Statement of Information online, and that LLC online filing will be available sometime thereafter.

Arguably, the processing times situation has reached the crisis point where the Secretary of State's office is dysfunctional, but, on the other hand, the office has reduced the filing backlog for most other types of filings, perhaps at the expense of Statement of Information processing.

California BOE Sales Tax Permit (Sellers Permit) Tips

The Board of Equalization (BOE), charged with collecting California's sales and use tax, will soon be revising its seller's permit application form to reflect that names, addresses, and products purchased from major suppliers (if any) must be provided whether they are California-based or not.

Some other tips when obtaining a seller's permit (also referred to as a resale certificate or sales tax permit):

• It takes an average of 2-3 weeks to obtain one by mail, but you may obtain one on the spot in person at one of the BOE's field offices
  
• Possibly the most common error when mailing the application (Form BOE-400-SPA) is forgetting to attach copies of drivers' licenses
  
• Signatures on the application must match those on the drivers' licenses
  
• Foreign corporations and LLCs will not be issued a permit unless they are registered with the Secretary of State
• Contrary to what many BOE employees believe and may tell you, a social security number is not required in order to obtain a permit for a limited liabilty company (this issue arises when the LLC members are foreign nationals without SSNs or ITINs)

Other assistance and tips are provided to our clients as relevant.

California Sales Tax Rates as of October 1, 2011

The statewide California sales tax rate is 7.25% but various county and cities add surcharges, for example, Los Angeles County adds 1.00% for a total sales/use tax rate of 8.25%.

Effective October 1, 2011, sales tax rates are as follows (includes state, county, local, and district taxes:

ALAMEDA CO. 8.75%
City of San Leandro 9.00%
City of Union City 9.25%

ALPINE CO. 7.25%

AMADOR CO. 7.75%

BUTTE CO. 7.25%

CALAVERAS CO. 7.25%

COLUSA CO. 7.25%
City of Williams 7.75%

CONTRA COSTA CO. 8.25%
City of Concord 8.75%
City of El Cerrito 9.25%
City of Pinole 8.75%
City of Richmond 8.75%

DEL NORTE CO. 7.25%

EL DORADO CO. 7.25%
City of Placerville 7.75%
City of So. Lake Tahoe 7.75%

FRESNO CO. 7.975%
City of Reedley 8.475%
City of Sanger 8.725%
City of Selma 8.475%

GLENN CO. 7.25%

HUMBOLDT CO. 7.25%
City of Arcata 8.00%
City of Eureka 8.00%
City of Trinidad 8.00%

IMPERIAL CO. 7.75%
City of Calexico 8.25%

INYO CO. 7.75%

KERN CO. 7.25%
City of Arvin 8.25%
City of Delano 8.25%

KINGS CO. 7.25%

LAKE CO. 7.25%
City of Clearlake 7.75%
City of Lakeport 7.75%

LASSEN CO. 7.25%

LOS ANGELES CO. 8.75%
City of Avalon 9.25%
City of El Monte 9.25%
City of Inglewood 9.25%
Pico Rivera 9.75%
Santa Monica 9.25%
South El Monte 9.25%
City of South Gate 9.75%

MADERA CO. 7.75%

MARIN CO. 8.00%
City of Novato 8.50%
City of San Rafael 8.50%

MARIPOSA CO. 7.75%

MENDOCINO CO. 7.25%
City of Fort Bragg 7.75%
City of Point Arena 7.75%
City of Ukiah 7.75%
City of Willits 7.75%

MERCED CO. 7.25%
City of Gustine 7.75%
City of Los Banos 7.75%
City of Merced 7.75%

MODOC CO. 7.25%

MONO CO. 7.25%
Mammoth Lakes 7.75%

MONTEREY CO. 7.25%
City of Del Rey Oaks 8.25%
City of Marina 8.25%
City of Pacific Grove 8.25%
City of Salinas 7.75%
City of Sand City 7.75%
City of Seaside 8.25%

NAPA CO. 7.75%

NEVADA CO. 7.375%
City of Nevada City 7.875%
Town of Truckee 7.875%

ORANGE CO. 7.75%
City of La Habra 8.25%

PLACER CO. 7.25%

PLUMAS CO. 7.25%

RIVERSIDE CO. 7.75%
City of Cathedral City 8.75%

SACRAMENTO CO. 7.75%
City of Galt 8.25%

SAN BENITO CO. 7.25%
City of Hollister 8.25%
City of San Juan Bautista 8.00%

SAN BERNARDINO CO. 7.75%
City of Montclair 8.00%
City of San Bernardino 8.00%

SAN DIEGO CO. 7.75%
City of El Cajon 8.75%
City of La Mesa 8.50%
City of National City 8.75%
City of Vista 8.25%

SAN FRANCISCO CO. 8.50%

SAN JOAQUIN CO. 7.75%
City of Manteca 8.25%
City of Stockton 8.00%
City of Tracy 8.25%

SAN LUIS OBISPO CO. 7.25%
City of Arroyo Grande 7.75%
City of Grover Beach 7.75%
City of Morro Bay 7.75%
City of Pismo Beach 7.75%
City of San Luis Obispo 7.75%

SAN MATEO CO. 8.25%
City of San Mateo 8.50%

SANTA BARBARA CO. 7.75%

SANTA CLARA CO. 8.25%
City of Campbell 8.50%

SANTA CRUZ CO. 8.00%
City of Capitola 8.25%
City of Santa Cruz 8.50%
City of Watsonville 8.25%

SHASTA CO. 7.25%

SIERRA CO. 7.25%

SISKIYOU CO. 7.25%
City of Mt. Shasta 7.50%

SOLANO CO. 7.375%

SONOMA CO. 8.00%
City of Cotati 8.50%
City of Rohnert Park 8.50%
City of Santa Rosa 8.50%
City of Sebastopol 8.25%

STANISLAUS CO. 7.375%
City of Ceres 7.875%

SUTTER CO. 7.25%

TEHAMA CO. 7.25%

TRINITY CO. 7.25%

TULARE CO. 7.75%
City of Dinuba 8.50%
City of Farmersville 8.25%
City of Porterville 8.25%
City of Tulare 8.25%
City of Visalia 8.00%

TUOLUMNE CO. 7.25%
City of Sonora 7.75%

VENTURA CO. 7.25%
City of Oxnard 7.75%
City of Port Hueneme 7.75%

YOLO CO. 7.25%
City of Davis 7.75%
City of West Sacramento 7.75%
City of Woodland 8.00%

YUBA CO. 7.25%
City of Wheatland 7.75%

Assistance with, and advice regarding, sales tax permit registration is included in our full-service LLC formation and full-service incorporation packages.