BILL ANALYSIS �
AB 1352
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Date of Hearing: May 11, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1352 (Logue) - As Amended: March 22, 2011
Policy Committee: Revenue and
Taxation Vote: 9-0
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill grants the State Board of Equalization (BOE)
discretion to relieve interest under specified circumstances.
Specifically, this bill:
1)Provides that if BOE finds in its discretion that a person's
failure to make a timely payment was due to "extraordinary
circumstances" and that it is inequitable to compute interest
in accordance with the Sales and Use Tax (SUT) Law, then BOE
may relieve all or part of the interest imposed on that
payment as specified:
2)Limits the aggregate amount of relief granted to all persons
to $50,000 in a 12-month period but specifies that the $50,000
limitation does not apply to relief of interest granted by the
BOE pursuant to Revenue and Taxation Code (R&TC) Section 6593,
related to disasters.
3)Provides that any relief granted may be rescinded, and all
interest reestablished, without regard to any statute of
limitations, if a person fails to comply with the requirement
to make the underlying payment.
FISCAL EFFECT
1)The BOE staff states it is difficult to determine to what
extent relief of interest would be sought by taxpayers in
general, and to what extent BOE would act to provide relief
under the provisions of this bill. Therefore, the interest
revenue loss related to this bill is indeterminable. Under the
terms of this bill itself, however, the loss would not exceed
AB 1352
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$50,000 during any 12-month period. BOE staff indicates
administrative costs are minor and absorbable.
2)Negligible non-reimbursable costs for perjury convictions
which are unlikely.
COMMENTS
1)Purpose. According to the author, AB 1352 will allow BOE, the
bill's sponsor, some limited flexibility in providing interest
relief to taxpayers in situations where otherwise law-abiding
taxpayers make a late payment that was caused by a personal
tragedy, such as the death of a family member, or a medical
incapacity, or even criminal misconduct by a taxpayer's own
employee. The bill was prompted by a specific case where a
bookkeeper embezzled a substantial amount of sales tax
collected from the taxpayer's customers. Even though the
taxpayer had previously an excellent payment record with BOE,
and acted swiftly and appropriately when he discovered the
embezzlement and fired the bookkeeper (who was later
prosecuted and sentenced to prison), under the law, BOE had no
authority to grant the taxpayer any relief of the interest.
2)Related Legislation. AB 2375 (Knight), introduced in the
2009-10 legislative session, is identical to this bill. AB
2375 failed passage in the Senate Revenue and Taxation
Committee.
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081