I'm fighting to protect your rights and bring about fair tax policies that help grow our economy and jobs. As your taxpayer advocate and elected member of the California State Board of Equalization, I welcome your ideas about how we can work together to solve the problems facing our state.
If the Government Takes Your Money Illegally, Shouldn’t You Get It Back?
It is criminal that the State of California can keep money it illegally collects from its citizens. Anyone who, in good faith, pays what ends up being an illegal tax should get their money back. It’s as simple as that.
I am proud to sponsor legislation extending common sense protection to taxpayers. Two identical measures, AB 2510 (Wagner) and SB 1327 (Knight), would require the state to provide a full refund to all individuals who paid a tax later declared unconstitutional.
Currently, taxpayers are only eligible to receive refunds if they have exhausted all of their administrative appeals remedies, even if the tax they paid is later declared illegal. AB 2510 and SB 1327 would require the state to automatically issue refunds to taxpayers whose information is up to date. It would also open up an additional appeals period of one year after a state tax is declared unconstitutional, giving taxpayers a chance to apply for the refunds they deserve.
Our legislation would apply to state taxes and fees paid by both businesses and individuals, including the controversial Fire Prevention Fee. Even if a class action lawsuit challenging the fire fee is successful, under current law only taxpayers who filed appeals within 30 days of the date on their bills will be eligible for refunds.
Stay tuned for updates as these bills move forward.
Gas Tax Cut
Recently, I joined my fellow Board of Equalization (BOE) members in a 5-0 vote to lower the gasoline excise tax by 3.5 cents per gallon as of July 1, 2014.
Our vote is good news for California taxpayers. This much-needed tax relief will arrive as Californians are on the road for summer vacations.
Lower gas taxes are good for our economy and good for jobs, but even with this cut Californians will continue to pay one of the highest gas taxes in the nation.
Unfortunately, some in the Legislature want you to pay more taxes, rather than less. A leading lawmaker is proposing a new “carbon tax” that would raise the taxes you pay on gas by up to 43 cents per gallon.
Rather than plotting to raise taxes at a time when the state is already awash in cash, lawmakers should be finding ways to simplify our tax laws and make life easier for California taxpayers.
Lawmakers could start by scrapping the confusing and complicated gas tax formula they enacted in 2010 and replacing it with one that is simple, straightforward, and easy to understand.
Sell Your Home in a Short Sale? State Income Tax Relief
Californians who sold their home in a short sale in 2013 may be at risk of overpaying their state income taxes.
As you may recall, the Franchise Tax Board (FTB) informed me late last year that Californians who had mortgage debt forgiven in a short sale are not required to pay income tax on that debt.
I’ve recently learned that some tax preparation software may not be up to date, potentially forcing affected Californians to pay taxes they don’t owe. Adding to the confusion, some tax preparers may not be aware of this problem.
If you have questions, please contact my office at 1-916-445-2181. For more information on mortgage forgiveness debt relief and short sales, go to FTB’s webpage or call FTB at 1-800-852-5711.
If you are unsure whether your tax preparation software is calculating your short sale taxes correctly, you should contact the tax preparation software company’s customer service department for assistance.
Taxpayers should never have to pay more taxes than they owe. Be sure to look carefully before filing to avoid overpaying thousands of dollars in state tax.
Helping Business Owners
Doing business in California has become increasingly difficult, and to be successful it’s important business owners know their tax obligations and the rights and the resources at their disposal.
That’s why I recently hosted two telephone townhalls with the National Federation of Independent Business in which we discussed how to avoid common tax traps and other issues facing small business owners.
In case you missed it, here are the audio recordings for the first and second townhalls.
You can also find the townhall recordings, as well as additional taxpayer resources, at my new Tax Help for Small Businesses website at www.boe.ca.gov/smallbiz.
I also recently hosted a telephone townhall for the agricultural industry. Better understanding of tax laws allows farmers, ranchers, and business owners selling to the agricultural industry to spend less time concerning themselves with tax issues and more time running their businesses.
For more information, including a recording of the event, check out my Tax Help for the Agricultural Industry website at www.boe.ca.gov/ag.
Free Income Tax Assistance
My office is once again working with the Internal Revenue Service (IRS) and Franchise Tax Board (FTB) to help qualified individuals and families get a financial boost.
Started by the IRS, the Volunteer Income Tax Assistance program—or VITA—helps taxpayers take advantage of available tax credits. The Volunteer Income Tax Assistance (VITA) program provides free income tax preparation to individuals and families with household incomes of less than $52,000. VITA volunteers have been trained and certified by the Internal Revenue Service (IRS).
To get more information about VITA services in your community visit www.boe.ca.gov/runner/VITA.
Please help me spread the word about this valuable program.
Fire Fee: Bad Tax Gets Worse
The fire fee is a bad tax, not just because of the unnecessary burden it places on taxpayers, but because it is horribly inefficient to collect. From the beginning, the process of collecting the Fire Prevention Fee has been lengthy and expensive, proving it is a poor method for funding CAL-FIRE’s fire prevention efforts.
Unfortunately, this month the third round of Fire Prevention Fee bills began going out with the new rate of $152.33 (or $117.33 for the 97% who live in a local fire protection district). This set of bills will be for the 2013-14 fiscal year. Approximately 10,000 bills will be sent each day in alphabetical order by county. This marks the first time the BOE has sent two billings in the same fiscal year.
Remember, in order to be eligible for a refund under the lawsuit against the fire fee, property owners must protest every billing by timely filing a new Petition for Redetermination.
You can find a copy of the billing schedule at www.calfirefee.com/billing-schedule.
Keep up with all the latest fire fee news by following Calfirefee.com on Facebook or Twitter.
Q – Are sales to the United States government taxable?
A - When you make a sale to the United States government, the sale is generally exempt from sales or use tax. Any seller claiming the exemption must obtain and keep a copy of a government purchase order or other documents showing direct payment by the United States government. Other documentation may include a copy of a U.S. government credit card or credit card number, or other related documents which show direct payment by the U.S. government. You may claim a deduction for sales to the United States government on your sales and use tax return.
For more information, see BOE publication 102, Sales to the United States Government.
In the News
Free tax return help available in Fresno County (The Fresno Bee, 1/31/14).
To the governor: Resist the impulse to spend (New Times, 2/5/14)
George Runner: Responsible budget would eliminate inefficient fire fee (The Bakersfield Californian, 2/9/14)
Tax advice for people who sold home in a short sale in 2013 (The Record, 2/12/14)
State could lower gas tax by 10 percent (UT San Diego, 2/14/14)
BOE reduces gasoline excise tax (The Santa Clarita Valley Signal, 2/25/14)
Refund Illegal Taxes? (Cal Watchdog, 3/3/14)
California's Gas Tax Nightmare (Fox and Hounds Daily, 3/5/14)
Board of Equalization Opens Santa Clarita Office on Magic Mountain Parkway (KHTS, 3/10/14)