BILL ANALYSIS Ó AB 1559 Page 1 Date of Hearing: April 27, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair AB 1559 (Dodd) - As Amended April 13, 2016 ----------------------------------------------------------------- |Policy |Revenue and Taxation |Vote:|9 - 0 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: Yes State Mandated Local Program: NoReimbursable: No SUMMARY: This bill authorizes the State Board of Equalization (BOE) to provide a filing and payment extension of up to three months for specified taxpayers in the case of a natural or an economic disaster. The provisions of this bill apply to the Sales and Use Tax; Motor Vehicle Fuel Tax; Use Fuel Tax; Cigarette and Tobacco AB 1559 Page 2 Products Tax; Alcoholic Beverage Tax; Timber Yield Tax; Energy Resources Surcharge; Emergency Telephone Users Surcharge; Hazardous Substance Tax, Integrated Waste Management Fee; Oil Spill Response Prevention, and Administration Fees; Underground Storage Tank Fee; Fee Collections Procedures; and Diesel Fuel Tax Laws. FISCAL EFFECT: 1)There could be minor revenue loss related to foregone penalties for late returns beyond the existing one-month extension. 2)Minor and absorbable administrative costs because the BOE already has procedures to handle time extension provisions in existing law. COMMENTS: 1)Purpose. According to the author, this bill will provide business owners in disaster areas more time to file returns and pay tax obligations to the BOE. 2)Background. Generally, taxpayers who are late paying a tax must pay a 10% penalty plus interest on the unpaid tax. However, the BOE may waive the 10% penalty fee for one month for taxpayers coping with a disaster. Moreover, taxpayers may request a relief of the interest on that late payment as well. 3)Fee only. This bill only extends the period that a taxpayer may have to pay due taxes without facing a 10% penalty. Existing law already allows a taxpayer to request interest relief in the case of a disaster. AB 1559 Page 3 Analysis Prepared by:Luke Reidenbach / APPR. / (916) 319-2081