BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 2225
                                                                  Page  1

          Date of Hearing:   May 2, 2012

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                    AB 2225 (Perea) - As Amended:  March 29, 2012 

          Policy Committee:                              Revenue and 
          Taxation     Vote:                            8-0

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:              

           SUMMARY  

          This bill authorizes a taxpayer to file a reimbursement claim 
          with the State Board of Equalization (BOE) for bank charges and 
          other reasonable third-party check charge fees incurred as a 
          direct result of an erroneous processing action or erroneous 
          collection action by the BOE.  Specifically, this bill:  

          1)Adds erroneous processing and collection actions to the BOE 
            actions that allow a claim for reimbursement of bank charges 
            and third-party check charge fees incurred by a taxpayer.  

          2)Grants the BOE discretion to extend the 90-day filing period 
            for claims seeking reimbursement of bank charges and 
            third-party check charge fees incurred by a taxpayer as the 
            direct result of an erroneous BOE action.

           FISCAL EFFECT  

          The BOE estimates negligible revenue losses.

           COMMENTS  

           1)Purpose  .  Proponents of the bill, including the California 
            Taxpayers Association and the California Chamber of Commerce 
            note current law recognizes the importance of making taxpayers 
            whole for BOE errors because reimbursement is authorized in 
            instances where the BOE issues an erroneous levy or notice to 
            withhold.  This measure would ensure that taxpayers are also 
            held harmless when other BOE errors occur.  They argue this 
            approach is not only fair, but helps promote taxpayer trust in 
            a complicated system that often is less than friendly to 








                                                                  AB 2225
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            taxpayers.

           2)Background  .  Sales and use tax laws provide that a taxpayer 
            may file a claim with the BOE for the reimbursement of bank 
            charges and any other reasonable third-party check charge fees 
            incurred as a direct result of an erroneous levy or notice to 
            withhold, erroneous processing action or erroneous collection 
            action by the BOE.  Such claims must be filed within 90 days 
            from the date of the erroneous BOE action. 

           3)Related legislation  .  Among its provisions, AB 2688 (Committee 
            on Revenue and Taxation) contains similar provisions on 
            reimbursement of costs because of errors.
             
           Analysis Prepared by  :    Roger Dunstan / APPR. / (916) 319-2081