BILL ANALYSIS �
------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 658|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
CONSENT
Bill No: AB 658
Author: Charles Calderon (D)
Amended: 1/4/12 in Assembly
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 9-0, 6/28/12
AYES: Wolk, Dutton, DeSaulnier, Fuller, Hernandez, Kehoe,
La Malfa, Liu, Yee
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 75-0, 1/26/12 (Consent) - See last page
for vote
SUBJECT : State Board of Equalization: administration
SOURCE : Author
DIGEST : This bill makes technical, nonsubstantive
changes to the Revenue and Taxation Code to remove
duplicative wording and correct reference errors relative
to the Board of Equalization (BOE) tax administration
duties.
ANALYSIS :
Existing law:
1. Requires every person, retailer, and wholesaler engaged
in selling tangible personal property to remit the sales
CONTINUED
AB 658
Page
2
and use tax to the BOE. If a final tax liability is not
paid when due, the BOE bills the taxpayer, searches for
the taxpayer's assets, and takes collection actions to
gain access to assets to satisfy the debt.
2. Authorizes BOE to accept and approve offers in
compromise of a final tax, surcharge or fee liability
below certain amounts, if certain requirements are
satisfied. (Sales and Use Tax Law (Revenue and Taxation
Code (RTC) Section 7093.6), Use Fuel Tax Law (RTC
Section 9278), Cigarette and Tobacco Products Tax Law
(RTC Section 30459.15), Alcoholic Beverage Tax Law (RTC
Section 32471.5), Emergency Telephone Users Surcharge
Act (RTC Section 41171.5), Oil Spill Response,
Prevention, and Administration Fees Law (RTC Section
46628), Underground Storage Tank Maintenance Fee Law
(RTC Section 50156.18), Fee Collection Procedures Law
(RTC Section 55332.5), and Diesel Fuel Tax Law (RTC
Section 60637)).
3. Extends the BOE's offers-in-compromise program, until
January 1, 2013, to businesses that have not been
discontinued or transferred, provided that the final tax
liability arises from transactions in which the taxpayer
did not receive sales tax reimbursement or use tax, to
successors of businesses that may have inherited tax
liabilities of their predecessors, and to consumers that
have incurred a use tax liability.
4. Provides that, should the BOE determine that a taxpayer
concealed assets or falsified, withheld, destroyed, or
mutilated any book, document, or record relating to
their financial condition, the BOE may reestablish all
compromised liabilities and the taxpayer may be found
guilty of a felony and be may subject to a fine to
$50,000, or imprisoned, or both.
This bill corrects a reference within the offers in
compromise program for cigarette and tobacco products to
correctly refer to paragraph (3) instead of paragraph (2),
and removes a duplicative phrase. This bill also corrects
a reference within the offers in compromise program in the
Underground Storage Tank Maintenance Fee Law to refer to
the correct section and delete reference to Article 2 of
AB 658
Page
3
Chapter 8, which does not exist. Lastly, this bill applies
language found in the laws guiding the offers in compromise
program for all other tax and fee programs into a section
of the Fee Procedures Collections Law where it was
accidentally excluded.
Comments
In 2007, the Legislature expanded the program to allow BOE
to accept offers in compromise for businesses currently in
operation, as many taxpayers were surprised when BOE audits
uncovered transactions that the taxpayer did not know were
taxable, so they never charged consumers the tax (AB 2047
(Horton), Chapter 222, Statutes of 2008). Additionally,
for many firms, paying the entire liability would cause the
business to close. The bill allowed BOE to accept offers
from operating firms when:
1. The final tax liability arises from transactions for
which the BOE finds no evidence that the taxpayer
collected sales tax reimbursement or use tax,
2. The person liable is the successor to the business, or
3. A consumer has a use tax liability.
Unfortunately, when the Legislature enacted AB 2047, the
bill included duplicative phrases, incorrect cross
references, and did not include identical language across
the fee programs.
The purpose of this bill is to make technical and
non-substantive changes to remove duplicative wording and
correct reference errors.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 8/7/12)
State Board of Equalization
ASSEMBLY FLOOR : 75-0, 1/26/12
AB 658
Page
4
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Conway, Cook, Dickinson,
Donnelly, Eng, Feuer, Fletcher, Fong, Fuentes, Furutani,
Beth Gaines, Galgiani, Garrick, Gatto, Gordon, Grove,
Hagman, Hall, Hayashi, Roger Hern�ndez, Hill, Huber,
Hueso, Huffman, Jeffries, Jones, Knight, Lara, Logue,
Bonnie Lowenthal, Ma, Mansoor, Mendoza, Miller, Mitchell,
Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan,
Perea, V. Manuel P�rez, Portantino, Silva, Skinner,
Solorio, Swanson, Torres, Valadao, Wagner, Wieckowski,
Williams, Yamada, John A. P�rez
NO VOTE RECORDED: Davis, Gorell, Halderman, Harkey, Smyth
AGB:k 8/8/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****