BILL ANALYSIS �
-----------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 2009|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
-----------------------------------------------------------------
CONSENT
Bill No: AB 2009
Author: Weber (D)
Amended: 4/10/14 in Assembly
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 7-0, 6/11/14
AYES: Wolk, Knight, Beall, DeSaulnier, Hernandez, Liu, Walters
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 78-0, 5/15/14 (Consent) - See last page for
vote
SUBJECT : State Board of Equalization: administration:
managed audit
program
SOURCE : State Board of Equalization
DIGEST : This bill authorizes a voluntary managed audit
program for the Motor Vehicle Fuel Tax Law, Use Fuel Tax Law,
Cigarette and Tobacco Products Tax Law, Alcoholic Beverage Tax
Law, Energy Resources Surcharge Law, Emergency Telephone Users
Surcharge Act, Hazardous Substances Tax Law, Integrated Waste
Management Fee Law, Oil Spill Response, Prevention, and
Administration Fees Law, Underground Storage Tank Maintenance
Fee Law, Fee Collection Procedures Law, and Diesel Fuel Tax Law.
This bill provides that a taxpayer's account is eligible for
the managed audit program only if the taxpayer meets specified
criteria.
CONTINUED
AB 2009
Page
2
ANALYSIS : Existing law provides for a managed audit program
under the Sales and Use Tax Law. If the State Board of
Equalization (BOE) determines that a taxpayer's account is
eligible for the program and the taxpayer agrees to participate,
the taxpayer examines its own books, records, and equipment to
determine if it has any unreported tax liability for the audit
period, in compliance with the managed audit instructions
provided by the BOE. Upon completion of the managed audit and
verification by the BOE, interest on any unpaid liability is
computed at one-half the rate that would otherwise by imposed
for liabilities covered by the audit period.
This bill authorizes a voluntary managed audit program for the
Motor Vehicle Fuel Tax Law, Use Fuel Tax Law, Cigarette and
Tobacco Products Tax Law, Alcoholic Beverage Tax Law, Energy
Resources Surcharge Law, Emergency Telephone Users Surcharge
Act, Hazardous Substances Tax Law, Integrated Waste Management
Fee Law, Oil Spill Response, Prevention, and Administration Fees
Law, Underground Storage Tank Maintenance Fee Law, Fee
Collection Procedures Law, and Diesel Fuel Tax Law.
This bill provides that a taxpayer's account is eligible for the
managed audit program only if the taxpayer meets all of the
following criteria:
The taxpayer's business involves few or no statutory exemptions;
The taxpayer's business involves a single or small number of
clearly defined taxability issues;
The taxpayer agrees to participate in the managed audit program;
and
The taxpayer has the resources to comply with the managed audit
instructions provided by the BOE.
The BOE must identify all of the following if it selects a
taxpayer's account:
The audit period covered by the managed audit;
The types of transactions covered by the managed audit;
CONTINUED
AB 2009
Page
3
The specific procedures that the taxpayer is to follow in
determining any liability;
The records to be reviewed by the taxpayer;
The manner in which the types of transactions are to be
scheduled for review;
The time period for completion of the managed audit; and
The time period for the payment of the liability and interest.
This bill requires a participating taxpayer to examine its books
and records to determine if it has any unreported tax liability
for the audit period, and to make available to BOE for
verification all computations and books and records examined.
Upon completion verification, the BOE can only charge interest
on any unpaid liability at one-half the rate that would
otherwise be imposed for liabilities covered by the audit
period.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 6/25/14)
State Board of Equalization (source)
California Chamber of Commerce
California Taxpayers Association
ARGUMENTS IN SUPPORT : According to the author, "Managed
audits are essentially supervised self-audits. Under the
existing MAP [Managed Audit Program], the BOE is authorized to
determine which taxpayer accounts are eligible to participate in
a MAP and to enter into MAP Participation Agreements with
eligible taxpayers. The auditor provides written and oral
instructions to enable eligible taxpayers to perform audit
verification and prepare working paper schedules necessary to
complete certain portions of the audit. These audits are
advantageous for both tax payers and the BOE by limiting
disruption to a taxpayer's business activities while also
allowing the BOE to reallocate audit resources to conduct more
audits. BOE staff has also found that taxpayers who participate
in the MAP develop a better understanding of the laws that
CONTINUED
AB 2009
Page
4
affect them and are able to report tax liability more
accurately. By extending the authority of MAP to special tax
and fee programs, this bill will allow greater access to an
already successful program."
ASSEMBLY FLOOR : 78-0, 5/15/14
AYES: Achadjian, Alejo, Allen, Ammiano, Bigelow, Bloom,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Ch�vez, Chesbro, Conway, Cooley,
Dababneh, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox,
Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon,
Gorell, Gray, Grove, Hagman, Hall, Harkey, Roger Hern�ndez,
Holden, Jones, Jones-Sawyer, Levine, Linder, Logue, Lowenthal,
Maienschein, Medina, Melendez, Mullin, Muratsuchi, Nazarian,
Nestande, Olsen, Pan, Patterson, Perea, John A. P�rez, V.
Manuel P�rez, Quirk, Quirk-Silva, Rendon,
Ridley-Thomas, Rodriguez, Salas, Skinner, Stone, Ting, Wagner,
Waldron, Weber, Wieckowski, Wilk, Williams, Yamada, Atkins
NO VOTE RECORDED: Mansoor, Vacancy
AB:ke 6/25/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****
CONTINUED