Sales and Use Tax Law: consumer designation: all-volunteer fire departments.

Senator Seyarto's proposal to permanently classify all-volunteer fire departments as consumers rather than retailers under California's Sales and Use Tax Law would eliminate the January 2026 sunset date for their current tax status. The measure maintains existing requirements that these departments must use sales profits exclusively for departmental purposes and cannot exceed $100,000 in gross receipts from tangible personal property sales in each of the two preceding calendar years.

The bill preserves the definition of qualifying all-volunteer fire departments as organizations where members receive compensation only on an hourly or per-incident basis, exist to protect lives and property within designated areas, and maintain official recognition from local government entities. These departments must also qualify as exempt organizations under specified sections of state tax code or federal Internal Revenue Code provisions.

Under the legislation, the California Department of Tax and Fee Administration would provide annual estimates to the Legislature regarding revenue losses associated with the tax designation starting in 2026. The measure explicitly prevents state reimbursement to local agencies for any sales and use tax revenue reductions resulting from its provisions. As a tax levy, the bill would take effect immediately upon enactment.