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Business Taxes Law Guide—Revision 2024
Lithium Extraction Tax Law
Revenue and Taxation Code
Division 2. Other Taxes
Part 25. Lithium Extraction Tax Law
Chapter 1. General Provisions and Definitions
47000. Short title; purpose; legislative findings, declarations, intent. (a) This part shall be known, and may be cited, as the Lithium Extraction Tax Law.
(b) The purpose of this part is to promote a robust California-based lithium extraction industry that considers the needs of the local communities where the lithium extraction occurs, while recognizing the significant benefit of having a domestic supply of lithium for the state’s goals for reducing the emissions of greenhouse gases. By imposing a statewide tax on lithium extraction and preempting the taxing authority of counties, municipalities, and districts on the extraction and storage of lithium, lithium producers will have greater certainty about the potential costs of doing business and will be more likely to engage in lithium production activities.
(c) It is the intent of the Legislature to comprehensively regulate the imposition and collection of taxes on the extraction and storage of lithium and to occupy the field to the exclusion of local action, except as specifically provided in this part.
(d) The Legislature finds and declares that promoting the development of a robust lithium production industry in the state to reduce the impact of climate change is a matter of statewide concern and, therefore, is not a municipal affair as that term is used in Section 5 of Article XI of the California Constitution.
History—Added by Stats. 2022, Ch. 63 (SB 125), in effect June 30, 2022.
47002. Definitions. For purposes of this part, the following definitions apply:
(a) "Department" means the California Department of Tax and Fee Administration.
(b) "Extraction" means the process of removing lithium from geothermal fluid, spodumene ore, rock, minerals, clay, or any other naturally occurring substance by a physical or chemical process.
(c) "Geothermal fluid" means naturally occurring groundwater, brines, vapor, and steam associated with, or derived from, a geothermal resource.
(d) "Geothermal resource" has the same meaning as defined in Section 6903 of the Public Resources Code.
(e) "In this state" means within the exterior limits of the State of California and includes all territory within these limits owned by, or ceded to, the United States.
(f) "Metric ton" means a unit of mass equal to 1,000 kilograms.
(g) "Minerals" has the same meaning as defined in Section 2005 of the Public Resources Code.
(h) "Producer" means any person who extracts lithium from geothermal fluid, spodumene ore, rock, minerals, clay, or any other naturally occurring substance in this state.
(i) "Committee" means the Lithium Extraction Tax Citizens Oversight Committee.
History—Added by Stats. 2022, Ch. 63 (SB 125), in effect June 30, 2022. Stats. 2023, Ch. 506 (SB 797), in effect January 1, 2024, added subdivision (i).