In light of a number of problems at the California State Board of
Equalization (BOE), the California General Assembly has passed legislation
that, if enacted, would strip the BOE of all but its constitutionally mandated
tax functions. In addition, the legislation would create a new Department of
Tax and Fee Administration (DTFA) and a new Office of Tax Appeals (OTA) to
assume between the two of them all the other current duties, powers, and
responsibilities of the BOE. Some of the changes would be operative as early as
July 1, 2017.
- inappropriate intervention by
board members in administrative and appeal-related activities;
- numerous complaints concerning
attempts by the board members and their staffs to influence audits,
investigations, and collection activities by civil service employees;
- exertion of undue influence by
board members and their staffs that handicapped employees in their efforts
to fairly apply the law;
- routine interference by board
members or their staffs that effectively eliminated the ability of the
executive director and upper management to operate the organization; and
- significant errors in the
allocation of sales and use tax revenue due to the board’s failure to
focus on its core responsibilities.
If signed by the Governor,
the legislation would cut back the duties, powers, and responsibilities of the
board to various property tax assessment and equalization functions and
assessment of taxes on insurers authorized by Article XIII of the state
constitution; assessment and collection of excise taxes on alcohol pursuant to
Article XX of the state constituted; and the duty to adjust the rate of the
motor vehicle fuel tax for the 2018-19 fiscal year (residual responsibilities).
- various types of petitions,
- an administrative protest,
- a claim for refund,
- an appeal from an action by the
Franchise Tax Board (FTB),
- an application, including an
application for administrative hearing, and
- any other item that may be
scheduled for a hearing, including requests for relief of taxes, fees,
interest, or penalties.
Also beginning January 1,
2018, the BOE would not be permitted to conduct appeals, except as they relate
to its residual responsibilities.
Wilsontaxlaw.com
In light of a number of problems at the California State Board of
Equalization (BOE), the California General Assembly has passed legislation
that, if enacted, would strip the BOE of all but its constitutionally mandated
tax functions. In addition, the legislation would create a new Department of
Tax and Fee Administration (DTFA) and a new Office of Tax Appeals (OTA) to
assume between the two of them all the other current duties, powers, and
responsibilities of the BOE. Some of the changes would be operative as early as
July 1, 2017.
Operational Culture
According to legislative
findings in the bill, "the board’s operational culture severely
impacts its ability to report accurate and reliable information to the public,
the administration, and the Legislature."The findings enumerated specific
problems with the current board, including:
- inappropriate intervention by
board members in administrative and appeal-related activities;
- numerous complaints concerning
attempts by the board members and their staffs to influence audits,
investigations, and collection activities by civil service employees;
- exertion of undue influence by
board members and their staffs that handicapped employees in their efforts
to fairly apply the law;
- routine interference by board
members or their staffs that effectively eliminated the ability of the
executive director and upper management to operate the organization; and
- significant errors in the
allocation of sales and use tax revenue due to the board’s failure to
focus on its core responsibilities.
If signed by the Governor,
the legislation would cut back the duties, powers, and responsibilities of the
board to various property tax assessment and equalization functions and
assessment of taxes on insurers authorized by Article XIII of the state
constitution; assessment and collection of excise taxes on alcohol pursuant to
Article XX of the state constituted; and the duty to adjust the rate of the
motor vehicle fuel tax for the 2018-19 fiscal year (residual responsibilities).
In relation to
administrative matters, members of the BOE will not be permitted to appoint,
remove, discipline, or issue orders to any BOE employee. BOE members are also
prohibited from interfering with or influencing the process of the BOE’s or the
DTFA’s legislative analyses, or any other form of technical assistance
requested by the governor or the Legislature.
Department of Tax and Fee Administration
Operative July 1, 2017, the
DTFA would be the successor to the duties, powers, and responsibilities of the
BOE, except for the its residual responsibilities and its ability to conduct
appeals hearings. Generally, unless the context clearly requires otherwise,
whenever any reference to the BOE appears in any statute, regulation, contract,
or other code, with respect to the functions transferred to the DTFA, it will
be deemed to refer to the DTFA.
Office of Tax Appeals
Beginning January 1, 2018,
the OTA would be the successor to all of the duties, powers, and
responsibilities of the BOE necessary or appropriate to conduct appeals
hearings, except as those powers relate to the BOE’s residual responsibilities.
For purposes of this change, “appeal” means:
- various types of petitions,
- an administrative protest,
- a claim for refund,
- an appeal from an action by the
Franchise Tax Board (FTB),
- an application, including an
application for administrative hearing, and
- any other item that may be
scheduled for a hearing, including requests for relief of taxes, fees,
interest, or penalties.
Also beginning January 1,
2018, the BOE would not be permitted to conduct appeals, except as they relate
to its residual responsibilities.
A.B. 102, Laws 2017, as
sent to enrolling June 15, 2017
Wilsontaxlaw.com
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