BILL ANALYSIS �
AB 2453
Page 1
Date of Hearing: May 16, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 2453 (Block) - As Amended: March 19, 2012
Policy Committee: Revenue and
Taxation Committee Vote: 8-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill allows any person against whom a determination of
unpaid taxes or fees is made, to petition for a redetermination
within 60 days of being served with notice, instead of the
30-day period prescribed by existing law. This lengthened
redetermination period applies to the sales and use tax, motor
vehicle fuel tax, and 13 other taxes and fees administered by
the Board of Equalization (BOE).
FISCAL EFFECT
Minor increased revenues to the state from taxpayers delaying
their payments and, as a result, the state collecting an
increased amount of interest on the delayed payments. The
interest rate on underpayments is calculated by adding three
percentage points to the rate specified in the Internal Revenue
Code and is adjusted semiannually. The rate for underpayments
is currently 7%.
COMMENTS
1)Purpose. According to the author, BOE taxpayers are primarily
business owners, including small business owners who hold a
permit or license with the BOE and file tax returns. The
author argues that for some of these business owners, current
law does not allow ample time to develop and prepare their
petitions. For example, should a business owner decide to
hire a tax professional, a 60-day deadline will provide time
to gather documents and consult with the professional.
The author concludes, especially in the current economic
AB 2453
Page 2
crisis, business owners need all the help they can get to keep
their businesses afloat, and that allowing for a longer period
to file a petition will enable business owners to better
clarify and substantiate their appeal.
2)Background . Taxpayers most often file petitions as the result
of a BOE field audit or investigation. If BOE determines a
taxpayer has underpaid taxes or fees, a notice is issued.
Before a notice is issued, the taxpayer is informed of the
30-day deadline when filing a petition. Beginning with an exit
conference with the taxpayer and/or the taxpayer's
representative, the auditor explains the audit procedures used
and any additional taxes or fees due. If the taxpayer
disagrees with the audit results, the auditor generally defers
preparing the final audit report to allow the taxpayer a
reasonable amount of time to provide additional information to
support its arguments. During the exit conference, the
auditor also explains the steps involved in filing a timely
petition and gives a BOE publication on the appeals process.
3)Sponsor and purpose. This bill is sponsored by the BOE, with
unanimous consent of all board members. For some taxpayers,
current law does not allow ample time to develop and prepare
their petitions. Allowing for a longer period to file a
petition will enable taxpayers to better clarify and
substantiate their position. In addition, the 60-day period
is consistent with the filing period utilized by the Franchise
Tax Board (FTB).
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081