BILL ANALYSIS �
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: AB 2225 HEARING: 7/3/12
AUTHOR: Perea FISCAL: Yes
VERSION: 3/29/12 TAX LEVY: No
CONSULTANT: Miller
STATE BOARD OF EQUALIZATION: ERRONEOUS CHARGES
Authorizes a taxpayer to file a reimbursement claim with
the BOE for bank charges and check fees incurred as a
direct result of erroneous processing.
Background and Existing Law
The 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.
Proposed Law
Assembly Bill 2225 adds two provisions that allow BOE to
provide administrative relief to taxpayers for bank and
third party fees:
1.Adds erroneous processing and collection actions to the
list of BOE actions giving rise to 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
State Revenue Impact
According to the BOE, the revenue impact is negligible.
Comments
1. Purpose of the bill . The author provides the following
AB 2225 -- 3/29/12 -- Page 2
statement in tsupport of the bill: The Board of
Equalization (BOE) can take action, such as a levy or
notice to withhold, against taxpayers that have been
determined to be delinquent in their payments.
Unfortunately, this action is sometimes in error. Existing
law allows taxpayers to file a claim for reimbursement of
bank fees and third party charges when the BOE takes
erroneous processing or collection actions in regards to
Sales and Use Tax, but in other circumstances taxpayers are
responsible for paying those fees, leaving the taxpayer
liable for BOE mistakes. It is only fair and equitable to
reimburse taxpayers for bank and third party check charges
when those charges are a direct result of a BOE error, and
not the fault of the taxpayer. The proposed change is
consistent with the Sales and Use Tax Law, and the intent
of the original legislation that authorized the BOE to
reimburse taxpayers for such charges stemming from BOE
errors.
2. How long is long enough ? This bill grants BOE
discretion to extend the 90 day filing period for claims
seeking reimbursement for bank charges. According to the
BOE analysis, taxpayers are sometimes prevented from filing
a claim within 90 days from the date of the erroneous BOE
action. In this case there are two erroneous actions: (1)
the erroneous bank fee charge and (2) an erroneous action
by the BOE that leads to late filings. The Committee may
wish to consider if the BOE should rethink its current
processes so as not to make so many erroneous actions
instead of asking the Legislature to provide multiple
extensions for tax filings. If the BOE needs an extension
after 90-days for relief at all, the Committee may wish to
limit BOE's administrative relief and consider restricting
the provision to include matters of clerical errors only.
Assembly Actions
Assembly Revenue and Taxation: 8-0
Assembly Appropriations: 17-0
Assembly Floor: 73-0
Support and Opposition (6/28/12)
Support : California Chamber of Commerce; California
Taxpayers Association.
AB 2225 -- 3/29/12 -- Page 3
Opposition : Unknown.