Vetoed by Governor Arnold Schwarzenegger

Vote Smart's Synopsis:

Vote to pass a bill that eliminates the sales and use tax on motor vehicle fuel, establishes an oil severance tax, and supplements additional sales, use, and income taxes.

Highlights:

- Exempts motor vehicle fuel from the sales and use taxes beginning April 1, 2009, excluding jet fuel, diesel fuel, kerosene, liquefied petroleum gas, natural gas (liquid or gaseous form), alcohol, or racing fuel (Sec. 3). - Administers an additional retail sales tax at a rate of 0.5 percent of the gross receipts of retailers from the sale of tangible personal property beginning February 1, 2009 (Sec. 1). - Administers an additional retail use tax at a rate of 0.5 percent of the sales price of tangible personal property beginning February 1, 2009 (Sec. 2). - Administers an additional income tax at a rate of 2.5 percent of one's tax liability for each taxable year beginning January 1, 2009 (Sec. 5). - Administers a new tax on the severing of oil from the earth or water at a rate of 9.9 percent of the gross value of each barrel of oil severed beginning July 1, 2009 (Sec. 7). - Exempts the following from the oil severance tax (Sec. 7):

- Oil produced by a stripper well in which the average value of oil on January 1 of the previous year is less than $30 per barrel; - For a period of 10 years: Oil produced from a "hazardous well," "idle-deserted well," or a well that has been inactive for at least the past five consecutive years; - Oil owned or produced by the state and any political subdivision's proprietary share of oil produced under any unit, cooperative, or other pooling agreement.

Full Bill Text