BILL ANALYSIS �
AB 2009
Page 1
Date of Hearing: May 7, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 2009 (Weber) - As Amended: April 10, 2014
Policy Committee: Revenue &
Taxation Vote: 9-0
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill extends the Managed Audit Program (MAP) authority of
the Board of Equalization (BOE) that currently exists under the
Sales and Use Tax Law to 12 additional special tax and fee
programs. Under the MAP, a taxpayer may voluntarily agree to
conduct a self-audit of its books and records to determine, in
accordance with instructions provided by the BOE, if it has any
unreported tax liability for the relevant audit period.
Taxpayers that participate in the MAP receive a 50% reduction in
the interest due on any unpaid liability discovered during the
audit.
FISCAL EFFECT
1)Minor and absorbable costs to the BOE.
2)BOE estimates potential revenue gain from additional audits
and better utilization of audit resources of approximately
$250,000.
COMMENTS
1) Purpose. According to the author and the sponsor, the BOE,
MAPs are advantageous to taxpayers and the state because they
limit disruption to a taxpayer's business activities and allow
the BOE to reallocate audit resources to focus on other
taxpayers. BOE staff has found that taxpayers who participate
in the MAP develop a better understanding of the tax laws and
are able to report tax liability more accurately. By
extending the MAP authority to special tax and fee programs,
this bill will build upon an already successful program.
AB 2009
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2) Managed Audits. Managed audits are essentially self-audits
conducted under close supervision by the BOE. The BOE
determines which taxpayers are eligible to participate in a
managed audit and enters into MAP Participation Agreements
with taxpayers who volunteer to participate.
Participating taxpayers receive a 50% interest reduction on
any unpaid liability discovered during the audit, while MAP
audits resulting in a credit or refund are computed using the
standard running balance method. In return, BOE saves the
staff resources that would otherwise have been used to perform
verification activities not performed by that taxpayer. The
audit resources saved can be redirected to more complex,
revenue-generating audits.
The MAP provisions do not limit the BOE's general authority to
examine a taxpayer's books and records.
The BOE has observed other benefits to managed audits,
including: earlier resolution of taxability issues; fewer
protested audits from taxpayers; improved cooperation between
the BOE and taxpayers; improved taxpayer education and
compliance; and decreased disruption of a taxpayer's regular
business activities.
3) Special Tax and Fee Programs Added to MAP. AB 2009 extends
the MAP authority to the following special tax and fee
programs:
a) Motor Vehicle Fuel Tax Law;
b) Use Fuel Tax Law;
c) Cigarette and Tobacco Products Tax Law;
d) Alcoholic Beverage Tax Law;
e) Energy Resources Surcharge Law;
f) Emergency Telephone Users Surcharge Act;
g) Hazardous Substances Tax Law;
h) Integrated Waste Management Fee Law;
AB 2009
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i) Oil Spill Response, Prevention, and Administration Fees
Law;
j) Underground Storage Tank Maintenance Fee Law;
k) Fee Collection Procedures Law; and,
l) Diesel Fuel Tax Law.
Analysis Prepared by : Joel Tashjian / APPR. / (916) 319-2081