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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 2. The Lithium Extraction Excise Tax
- 47010 Lithium extraction excise tax
- 47015 Lithium carbonate equivalent conversion factor
- 47020 Preemption; in lieu tax; other tax provisions
47010. Lithium extraction excise tax. (a) Beginning January 1, 2023, a producer shall pay a lithium extraction excise tax upon each metric ton of lithium carbonate equivalent extracted from geothermal fluid, spodumene ore, rock, minerals, clay, or any other naturally occurring substance in this state, at the following amounts:
| Lifetime cumulative metric tons of lithium carbonate equivalent extracted by a producer: | Applicable tax rate: |
|---|---|
| 20,000 or less | $400 per metric ton extracted. |
| Over 20,000 but not over 30,000. | $600 per metric ton extracted over 20,000 up to 30,000 metric tons, inclusive. |
| Over 30,000 metric tons. | $800 per metric ton extracted over 30,000. |
(b) (1) The tax brackets specified in subdivision (a) shall apply to the total metric tons of lithium carbonate extracted by a producer cumulatively beginning from the date the first metric ton of lithium carbonate was extracted. In each quarterly reporting period, as described in Section 47070, the producer shall add the amount of metric tons of lithium carbonate extracted during that quarter to the cumulative amount of lithium carbonate previously reported by the producer.
(2) Where the permit (ownership) of a mine, lithium extraction facility, or well changes, the cumulative amount of lithium carbonate extracted previously reported by the producer shall be assumed to be 30,000 metric tons.
(c) Beginning January 1, 2025, the lithium extraction tax rate imposed under subdivision (a) shall be adjusted annually by the department consistent with increases and decreases in the cost of living, as measured by the California Consumer Price Index issued by the Department of Industrial Relations or a successor agency, rounded to the nearest whole dollar. The first adjustment pursuant to this subdivision shall be an amount equal to the increase or decrease in the California Consumer Price Index for all urban consumers (CPI-U) from June 2023 to June 2024. Subsequent annual adjustments shall cover subsequent 12-month periods. The adjusted rate shall apply beginning the following January 1.
(d) A producer shall remit the tax to the department in a manner and form as prescribed by this part.
History—Added by Stats. 2022, Ch. 63 (SB 125), in effect June 30, 2022.
47015. Lithium carbonate equivalent conversion factor. For purposes of this part, the lithium and lithium compounds extracted shall be converted to lithium carbonate equivalent by multiplying the tonnage of lithium and lithium compounds by the appropriate conversion factor, as follows:
| Lithium or lithium compound: | Conversion factor: |
|---|---|
| Lithium (Li) | 5.323 |
| Lithium oxide (Li2O) | 2.473 |
| Lithium chloride (LiCl) | 0.871 |
| Lithium bromide (LiBr) | 0.425 |
| Lithium hydroxide monohydrate (LiOH.H2O) | 0.880 |
| Butyllithium (C4HgLi) | 0.576 |
| Lithium carbonate (Li2CO3) | 1.000 |
History—Added by Stats. 2022, Ch. 63 (SB 125), in effect June 30, 2022.
47020. Preemption; in lieu tax; other tax provisions. (a) It is the intent of the Legislature that this part preempt provisions pertaining to the imposition of taxes by counties, municipalities, and districts to the extent that the provisions are inconsistent with this part.
(b) Except as provided in subdivision (c), the taxes imposed by this part are in lieu of all county, municipal, or district taxes on lithium extraction or lithium storage by producers.
(c) This section does not prohibit the application of Part 1 (commencing with Section 6001), Part 1.5 (commencing with Section 7200), or Part 1.6 (commencing with Section 7251) to the sale, storage, use, or other consumption of lithium.
History—Added by Stats. 2022, Ch. 63 (SB 125), in effect June 30, 2022.