BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 1559| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 1559 Author: Dodd (D), et al. Amended: 6/21/16 in Senate Vote: 21 SENATE GOVERNANCE & FIN. COMMITTEE: 7-0, 6/15/16 AYES: Hertzberg, Nguyen, Beall, Hernandez, Lara, Moorlach, Pavley SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8 ASSEMBLY FLOOR: 79-0, 5/5/16 (Consent) - See last page for vote SUBJECT: State Board of Equalization: returns and payment: extension: disaster SOURCE: State Board of Equalization DIGEST: This bill allows the Board of Equalization (BOE) to extend the period to file a return or pay a tax up to three months in the case of a natural disaster. ANALYSIS: Existing law: 1)Creates the five-member BOE, composed of four members elected by district and the State Controller, to equalize rates and AB 1559 Page 2 assessment practices among counties, and charges it with administering the Sales and Use Tax, locally-imposed transactions and use taxes, several excise taxes, and more than 30 other fee programs. 2)Requires, generally, tax or fee payers to remit funds to BOE before the end of the month following the close of the reporting period, which is usually the calendar quarter. 3)Imposes penalties for failure to file returns and pay taxes and fees, generally 10 percent of the tax due, plus monthly, simple interest based on the tax due from the date the tax was due to the date it was paid. 4)Authorizes BOE to extend the period to file a return or pay tax for one month for good cause, provided that the taxpayer files a request within or before the extension period. If granted, taxpayers are usually still liable for one month's interest, but don't pay a penalty, and can file the return and remit the tax one month late. 5)Allows BOE to also relieve interest when it finds the taxpayer's failure to file the return or pay the tax was due to disaster, and occurred notwithstanding the exercise of ordinary care in the absence of willful neglect, so long as the taxpayer files a statement to that effect under penalty of perjury. BOE regulation defines "disaster" as fire, flood, storm, tidal wave, earthquake or similar public calamity, but doesn't require the disaster to result from natural causes. 6)Permits BOE to also relieve the taxpayer from failure to file penalties if it finds that the failure is due to reasonable cause, and occurred notwithstanding the exercise of ordinary care in the absence of willful neglect, again so long as the taxpayer files a statement to that effect under penalty of perjury. This bill: AB 1559 Page 3 1)Allows BOE to extend the period to file a return or pay tax up to three months in the case of a natural disaster. Any person seeking an extension must apply to BOE within or before the period for which the extension applies. 2)Applies the change to the Sales and Use Tax, the Motor Vehicle Fuel Tax, Use Fuel Tax, Cigarette and Tobacco Products Tax, Alcoholic Beverage Tax, Timber Yield Tax, Energy Resources Surcharge, Emergency Telephone Users Surcharge, Hazardous Substance Tax, Integrated Waste Management Fee, Oil Spill Fees, Underground Storage Tank Fee, Diesel Fuel Tax Laws, as well as the state's general purpose statute that guides BOE administration of several fees, the Fee Collections Procedures Law. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No SUPPORT: (Verified8/1/16) State Board of Equalization (source) Board of Equalization Member Fiona Ma Board of Equalization Member George Runner California Asian Pacific Chamber of Commerce California Society of Enrolled Agents Castro Valley/Eden Area Chamber of Commerce City of Lakeport Kern County Board of Supervisors Lake County Board of Supervisors Midtown Area Merchants Association Sonoma County Board of Supervisors Yolo County Board of Supervisors OPPOSITION: (Verified8/1/16) AB 1559 Page 4 None received ARGUMENTS IN SUPPORT: According to the author, "under limited circumstances, individuals and businesses are permitted to defer state and local taxes and fees to assist them in recovering from a disaster such as a wildfire. Temporary relief from paying taxes and fees helps those individuals and businesses focus their limited resources where they are needed most - to restore their livelihood. However, the one month deferral allowed under current law is not much more than tinkering on the impacted taxpayer's financial margins. AB 1559 revises current law by changing the one month deferral for paying of specified fees and taxes per filing period to three months per filing period in the case of a declared disaster. This would grant disaster impacted taxpayers a more significant and meaningful amount of time to restore their business activities and get back on their feet." ASSEMBLY FLOOR: 79-0, 5/5/16 AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon NO VOTE RECORDED: Beth Gaines Prepared by:Colin Grinnell / GOV. & F. / (916) 651-4119 8/3/16 19:20:47 AB 1559 Page 5 **** END ****