California Gov. Jerry Brown Tuesday signed into law legislation that calls for a 1% tax on retail lumber products effective Jan. 1, 2013. The new law is designed to protect the competitive interests of the state’s timber industry against out-of-state competitors by passing regulatory costs to consumers in a measure that is expected to raise $30 million for timber-industry regulations.
The Sacramento Beereports: “In a meeting with The Bee's editorial board last week, the governor argued the charge was a fee, not a tax, because funds were going directly to pay for regulatory activities. But legislative lawyers drafted the bill as a two-thirds supermajority tax because it imposes a charge on out-of-state lumber, whose producers see no benefit from regulatory relief.”
However, it’s drawn ire from building material dealers who will be forced to pass the cost along to their builder and contractor customers. The Bee notes that Home Depot, Lowes, and other building material dealers were opposed to the bill.
While the new law includes a provision for the reimbursement of retailers for costs incurred while collecting the tax, both the State Board of Equalization and lumber-industry computer software providers say that a Jan. 1 deadline might not be feasible, according to the West Coast Lumber & Building Material Association (WCLBMA).
In its September newsletter, the WCLBMA, formerly the Lumber Association of California and Nevada (LACN), notes:
“All through the debate, including the time when the proposal was part of the governor’s budget revisions, LACN/WCLBMA continued to voice its strong support for the concerns of the California timber producers on their issues of industry over-regulation, competition from other states and countries with lesser regulations, and regulatory decisions made at times based on political considerations. However, LACN believed that an additional tax is not the answer.”