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California Governor Exempts Healthcare Supplies From Sales, Use Tax

Dated Apr. 13, 2020

Citations: N-46-20

SUMMARY BY TAX ANALYSTS

California Gov. Gavin Newsom (D) signed an executive order that exempts from sales and use taxes critical supplies purchased by the state for healthcare providers treating COVID-19 patients, such as masks, gloves, eye protection, and gowns.

WHEREAS on March 4, 2020, I proclaimed a State of Emergency to exist in California as a result of the threat of COVID-19; and

WHEREAS stopping the spread of COVID-19 requires the availability and use of masks, personal protective equipment, and other critical materials that protect public health; and

WHEREAS there is a global shortage of such materials, including masks and other personal protective equipment, requiring that the State take immediate action to procure such materials and equipment to protect our healthcare providers and residents; and

WHEREAS under current market conditions California must have flexibility in order to negotiate the procurement of needed equipment and materials; and

WHEREAS under the provisions of Government Code section 8571, I find that strict compliance with various statutes and regulations specified in this order would prevent, hinder, or delay appropriate actions to prevent and mitigate the effects of the COVID-19.

NOW, THEREFORE, I, GAVIN NEWSOM, Governor of the State of California, in accordance with the authority vested in me by the State Constitution and statutes of the State of California, and in particular, Government Code sections 8567, 8570, 8571, and 8627, do hereby issue the following Order to become effective immediately;

IT IS HEREBY ORDERED THAT:

1) Revenue and Taxation Code section 6369(b)(2) shall be suspended as applied to masks, gloves, eye protection, gowns and other critical materials that protect public health (as may be designated by the Governor's Office of Emergency Services, in consultation with the California Health and Human Services Agency) sold to or purchased by the State, such materials sold to or purchased by the State shall be deemed to be intended for use in the prevention of disease under Revenue and Taxation Code section 6369(b), and gross receipts from the sales to or purchases by the State of such materials shall be exempt from sales and use taxes under Revenue and Taxation Code section 6369(a)(5).

2) California Code of Regulations, Title 18, section 1591(c)(2) shall be suspended as applied to masks, gloves, eye protection, gowns and other critical materials that protect public health (as may be designated by the Governor's Office of Emergency Services, in consultation with the California Health and Human Services Agency) sold to or purchased by the State, and such materials sold to or purchased by the State shall be deemed intended for use in the prevention of disease under California Code of Regulations, Title 18, section 1591(a)(9)(B).

IT IS FURTHER ORDERED that as soon as hereafter possible, this Order be filed in the Office of the Secretary of State and that widespread publicity and notice be given of this Order.

This Order is not intended to, and does not, create any rights or benefits, substantive or procedural, enforceable at law or in equity, against the State of California, its agencies, departments, entities, officers, employees, or any other person.

IN WITNESS WHEREOF I have hereunto set my hand and caused the Great Seal of the State of California to be affixed this 7th day of April 2020.

GAVIN NEWSOM
Governor of California

ATTEST:

ALEX PADILLA
Secretary of State

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